Jun 3, 2016 by


Gannett. | AP Photo/Richard Drew

Newspaper giant says substantial number of Tribune shareholders “withheld” votes for directors

By Peter Sterne

Newspaper chain Tribune Publishing announced today that it is changing its name to “tronc” and will switch its stock exchange listing from the New York Stock Exchange to Nasdaq. It will start trading on Nasdaq on June 20. The company described Tronc’s mission as being “a content curation and monetization company focused on creating and distributing premium, verified content across all channels.”

The moves are meant to signal that Tribune, which owns the Chicago Tribune and Los Angeles Times, is a media technology company rather a newspaper chain.

Meanwhile, Gannett — the largest newspaper chain in the US — said today that it is “reviewing whether to proceed with its acquisition offer” for Tribune Publishing, following the results of Tribune’s shareholders meeting earlier today.

Gannett made two all-cash offers for Tribune. The second, larger offer was for $15 per share, which was nearly double what Tribune stock was trading for when it was made. But Tribune chairman Michael Ferro and the company’s board of directors rebuffed Gannett’s offers.

Gannett encouraged Tribune shareholders to cast symbolic “withhold” votes against Tribune board members who stood for re-election during the shareholders meeting today in order to send a message of support for the deal.

Ferro and other shareholders voted in favor of the nominees to the board of directors, but a significant number of shareholders unaffiliated with the company voted to withhold their votes from the nominees. According to Gannett, four of Tribune’s largest shareholders withheld their votes and five of the eight board nominees received less than 50% support. (Since the nominees were running unopposed, they were all still elected to the board, but the relatively low levels of support still sent a message.)

During the shareholders meeting, Gannett VP of Investor Relations & Real Estate Michael Dickerson thanked Tribune shareholders for withholding their votes and made the case once more for a Gannett acquisition.

“Today, scale and efficiency are crucial to preserving the profitability needed to invest in great journalism and content. Gannett has the scale to succeed independently well into the future. An acquisition of Tribune would better position Tribune’s worthy publications to withstand the ongoing industry challenges,” he said. “Can Tribune navigate these challenges alone? We do not believe so.”

The shareholder vote is encouraging news for Gannett, but it still faces a board of directors that is unwilling to engage. POLITICO’s Ken Doctor wrote yesterday that Gannett may just give up its pursuit of Tribune, and an anonymous source told Bloomberg earlier today that Gannett was “leaning toward” dropping the bid.
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