Newspaper publisher Gannett wants to buy Tribune Publishing for more than $388 million, in a deal that would give the owner of USA Today control of the Los Angeles Times, the San Diego Union-Tribune and several other newspapers.
But Gannett said Monday that Tribune has refused to start "constructive discussions" about a deal since it first offered to buy its rival earlier this month. Tribune confirmed Monday that it received the unsolicited offer and said it "will respond to Gannett as quickly as feasible."
Gannett wants Tribune so that it can expand its USA Today Network, an effort it launched late last year to unite its national brand USA Today with its more than 100 local daily newspapers. The network allows the company to share stories more easily between USA Today and its smaller papers, which include the Detroit Free Press, The Des Moines Register and the Asbury Park Press. Earlier this year, the company remade the logos on all its local newspaper front pages and websites to say that they are "a part of the USA Today Network."
Buying Tribune would give Gannett 11 more daily newspapers, including the Orlando Sentinel, The Baltimore Sun and the Hartford Courant.
As more people get their news online, print media companies have been buying up newspapers and websites to fight falling advertising revenue and to reduce costs. Earlier this month, Gannett completed a $280 million deal to buy the Journal Media Group, adding 15 newspapers to its portfolio, including the Knoxville News Sentinel and the Milwaukee Journal Sentinel. Both Gannett and Tribune were spun off from larger media companies, which owned TV stations, to protect the accelerating growth of broadcast advertising from the falling fortunes of newspapers.
A Gannett takeover of Tribune could mean cost-cutting, shedding jobs and adding USA Today inserts into papers instead of national news sections, said media analyst Ken Doctor.
Gannett, which is based in McLean, Virginia, said it offered $12.25 in cash for each Tribune share. That's a 63 percent premium to Tribune's Friday closing price of $7.52. Gannett valued the total deal at about $815 million, which includes about $390 million of debt.
The offer comes after a shake-up at Tribune.
Last month, the Chicago-based company announced a reorganization that named each of its newspapers' editors as dual editors-in-chief and publishers. Most media companies keep those roles separate in order to avoid business interests affecting editorial content. In February, Tribune named Justin Dearborn as its new CEO, replacing Jack Griffin less than two years after he joined the business. The changes came months after Tribune received a more than $44 million cash infusion from a firm controlled by Chicago investor Michael Ferro, who is now chairman of Tribune. Gannett said Monday that CEO Robert Dickey talked about a possible deal with both Ferro and Dearborn.
Shares of Tribune Publishing Co. jumped $4.20, or 56 percent, to $11.72 in afternoom trading Monday. Gannett Co. shares rose 71 cents, or 4.5 percent, to $16.48.