As it plays coy with an unsolicited suitor, tronc Inc., owner of the Los Angeles Times, has floated the idea of acquiring an ad tech business.
Chief Executive Justin Dearborn confirmed the publisher had an interest in acquiring a company such as Undertone of New York or Playa Vista’s Rubicon Project when asked by an analyst during a Sept. 8 conference in New York.
Such an acquisition could be a savvy business move in an increasingly digital-first world. It could also be a way for tronc to position itself for a higher price as it responds to offers from Gannett Co., the country’s largest newspaper company.
Dana Meyer, a tronc spokeswoman, declined to comment on the speculation. However, she noted a March earnings call in which Dearborn said the company would consider acquiring a legacy publication and was “focused on technology initiatives that will accelerate our digital and commerce expansion.”
Although Daniel Kurnos, the Benchmark Co. analyst who floated the names of Undertone and Rubicon, stressed they were random examples, such an acquisition could make sense for tronc. The company is making a big bet on digital, and Rubicon, which has a market cap of $418 million and whose stock hit a 52-week low of $8.04 on Sept. 12, could be high on the list.
Rubicon representatives didn’t respond to calls seeking comment.
“If I were in the market for an ad tech company, Rubicon would definitely be one of my top choices,” said Mark Douglas, chief executive of Steelhouse, a digital marketing and advertising company in Culver City, who added that the ad tech market in general is undervalued now.
“A company like Rubicon has had significant revenue, steady growth, has always succeeded analysts’ expectations, and yet its stock price is down for no real reason,” he said.
On the other hand, Kurnos said, tronc’s suggestion might just be posturing to drive Gannett’s offer higher.
Tronc has rejected two bids from Gannett, one of $12.25 a share and a sweetened offer of $15 a share. Bloomberg reported on Sept. 9 that tronc was in active discussions with Gannett over an offer of $18.50 a share, about $673 million.
Michael Dickerson, vice president of investor relations for Gannett, said he couldn’t comment.
