The long-awaited end to the tronc-Gannett saga might be near. Then again, it might not be. The possibility of the announcement of a deal on Monday for Gannett, the newspaper chain and publisher of USA Today and other dailies, to purchase Los Angeles Times parent tronc was first reported by Politico on Sunday.
Gannett began the public pursuit of tronc, then known as Tribune Publishing, on April 25 when it announced its $815 million offer to acquire the company for $12.25 a share in cash. Gannett increased its offer to $15 a share in May, then reportedly increased it to $18 in August, but a deal could still not be reached.
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The reported price for the finalized deal would be between $18.50 and $19 a share – a nearly 50 percent increase from the original offer – with financing support from Jefferies LLC, a large global investment bank based in New York, according to the report.
“The deal, if it happens, is based on the value of the combined entity, which is a dicey bet,” said Lloyd Greif, chief executive of investment banking firm Greif & Co. “Its stock performance will depend on how well the companies are integrated post-acquisition.”
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While the slightly higher price could suit tronc Chairman Michael Ferro, it might displease the company’s second-largest shareholder: billionaire Patrick Soon-Shiong, an L.A. native who has long been committed to owning the Times, and invested $70.5 million in the company and received a board seat in June. Soon-Shiong reportedly has threatened to sue if tronc is sold to Gannett so soon after he invested in Ferro’s vision.
“Patrick didn’t invest for a quick buck,” said Greif. “But if Ferro wants to do a deal, there isn’t much Patrick can do about it. He pretty much boxed himself in when he became a member of the board. Even if he’s upset, he has a fiduciary responsibility to the shareholders.”
A Gannett spokeswoman declined to comment on the Politico report, and tronc could not be reached for comment at the time of publication. A spokesman for Soon-Shiong said he could not be reached for comment.
Tronc’s stock opened at $17.47 on Monday and rose to $17.50 during mid-day trading. Gannett’s stock opened at $11.66 and rose to $11.79.
