Gannett, which owns local newspaper publisher Newsquest in the UK, has made a $12.25 (£8.44) per share offer to take over Tribune Publishing.
The all-cash offer, a 63% premium on Tribune’s closing share price on Friday, includes taking on about $390m in debt.
“We are pleased to offer Tribune stockholders a significant and compelling premium and immediate cash value for their investment,” said John Jeffry Louis, chairman of Gannett’s board of directors.
A combination with Tribune would rapidly advance Gannett’s strategy to grow the USA Today Network, the largest local to national network of journalists in the country, to include more local markets and new platforms, which we believe will benefit readers and result in significant and sustained value creation for Gannett stockholders.”
Gannett said that a combination of the companies would make for $50m in savings annually.
Tribune owns a number of key titles in major metropolitan areas such as the Baltimore Sun, Chicago Tribune, Orlando Sentinel and Hartford Courant.
In a letter to Justin Dearborn, chief executive of Tribune Publishing, Gannett’s board said that it was disappointed that the company had rejected the offer which was first made privately on 12 April.
“We are disappointed by … Tribune’s continued refusal to begin constructive discussions with us,” said Gannet’s board in a letter to Tribune published on Monday.
“We believe Gannett is uniquely willing and able to propel Tribune into the position of strength that will allow its beloved and historic publications and other assets to survive and thrive in this challenging environment. 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.”
Gannett says that it made the public bid, which is says represents “substantial value”, to make shareholders aware of the offer “given Tribune’s attempts to delay constructive engagement”.
“We are confident that Tribune’s non-management stockholders will support our proposal,” said Gannett.
Chicago-based Tribune reported a loss of $2.8m last year.
