The so-called declining newspaper business might be worth more than analysts previously thought.

With reports that Gannett Co. has renewed its interest in acquiring Los Angeles Times parent tronc Inc. by raising its offer to $18 a share, questions loom over which company has more to gain from a deal, if it comes together.

After rebuffing Gannett bids of $12.25 a share in April and $15 in June, tronc’s stock has stayed strong, likely in anticipation of a deal. Gannett stock, however, has faltered.

“It’s not surprising that Gannett is still in the hunt,” said Lloyd Greif, chief executive of downtown investment banking firm Greif & Co. “Gannett’s stock has continued to slip. It’s down more than 20 percent. They need to do something.”

How high Gannett is willing to go – or how creative it is willing to be – is not known. Even if Gannett makes its higher bid official, tronc Chairman Michael Ferro and Patrick Soon-Shiong, its second-largest shareholder, might try to retain some of tronc’s assets.

“The Los Angeles Times is the jewel in the crown and Ferro knows it,” Greif said, adding that Soon-Shiong has long held a personal interest in owning his hometown paper.

As for Gannett, acquiring tronc for an inflated price could still make strategic sense from a consolidation and advertising scale perspective. While the Times is a larger metro daily than Gannett typically acquires, the lucrative Southern California market could help it secure better rates from advertisers.

“The Tribune brand has a power and weight well beyond its stock price,” said Nicco Mele, director of the Shorenstein Center at Harvard University and a former senior vice president and deputy publisher at the Times. “But the higher the price per share goes, the crazier it seems.”

Representatives of Gannett declined to comment. A tronc spokesman said Chief Executive Justin Dearborn would not be available for interviews until Sept. 5 and declined to comment on the Gannett offer.

Extra, extra

Ferro and Soon-Shiong have been pitching the value of their digital strategy after the newspaper company formerly known as Tribune Publishing Co. rebranded and moved to trade on the Nasdaq, home to a host of technology companies, on June 20. The company’s share price has risen nearly 22 percent since the Gannett offer and the move to Nasdaq, closing at $17.02 on Aug. 30.

Soon-Shiong’s $70.5 million investment in May, coupled with more than 100 patents in machine learning and artificial intelligence held by his NantWorks that could be utilized by tronc, were meant to serve as evidence of the publisher’s transformation into a nimble, digital-first media company primed for the future.

Not everyone was convinced.

Nearly half of all shareholders not affiliated with tronc withheld their support from the entire slate of director nominees at the company’s May shareholder meeting; more than 50 percent withheld their support from Ferro; Dearborn; and former Chairman Eddy Hartenstein, who now serves as a director.

Meanwhile, tronc shareholder Capital Structures Realty Advisors of San Diego filed a shareholder lawsuit in June against Ferro and the rest of the tronc board claiming they breached their fiduciary duty by failing to consider Gannett’s $15-a-share offer and instead accepting a similarly priced one from Soon-Shiong for far fewer shares. Another large shareholder, downtown Oaktree Capital, has also urged the board to engage in negotiations with Gannett.

“The withheld votes for Ferro, public statements, and the lawsuit filed by Capitol Structures are all signs that the shareholders are pretty upset already,” said Nell Minow, a corporate governance expert and vice chairwoman of Value Edge Advisors of Portland, Maine. “From a corporate governance perspective, tronc should press the reset button and go back to the beginning and negotiate the original offer from Gannett.”

And more lawsuits could be on the way if things drag out much further.

“I can guarantee you there are people sharpening their pencils now, getting ready if a deal cannot be made,” Minow added.

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