Gannett has made an $815 million offer to buy Tribune publishing.
The offer was made public by the company on Monday morning, after it says its private entreaties were rebuffed by the newspaper publisher.
Gannett will pay about $815 million in cash for Tribune, or $12.25 a share. That would make up a 63% premium based on Tribune’s closing price of $7.52 a share on Friday.
“Given the substantial value represented by our offer and the other compelling benefits of a combination of Gannett and Tribune, we are confident that Tribune’s non-management stockholders will support our proposal,” Gannett CEO Robert Dickey wrote in a letter to Tribune CEO Justin Dearborn.
Following the attempt of a buyout, investors pushed Tribune stock up 60% in early trading. The company’s shares are now trading at about $12.
45 minutes after the offer was made public the Tribune company said it was not refusing to negotiate. The company says it needs time to get its financial and legal needs in order.
“The Board is now engaged, with the assistance of its advisors, in a thorough review,” Tribune said. “The Board is committed to acting in the best interests of shareholders and will respond to Gannett as quickly as feasible.”
Tribune Publishing owns the Los Angeles Times, Chicago Tribune, Baltimore Sun, and various other daily newspapers.
Gannett owns USA Today, the Detroit Free Press, Des Moines Register, Cincinnati Enquirer, and more than 100 other smaller local media brands.
Both companies have struggled to remain competitive in a quickly changing digital media marketplace.
“The challenges for our industry in the digital age continue,” Dickey wrote to Dearborn.
He added: “By combining, we would create a company with the financial stability and flexibility equipped to preserve journalistic integrity, high standards and excellence for years to come. We would be able to both empower our journalists and facilitate the creation of exceptional content while delivering stockholder value.”