Gannett Considering Dropping Bid For Tribune Publishing

Shareholders of Tribune Publishing Co TPUB and Gannett Co Inc GCI are watching the drama of a hostile takeover bid unfold in real time. Today, reports that Gannett is considering dropping its bid for Tribune briefly sent Tribune’s shares plummeting by as much as 13 percent and now have Gannett’s shares down 1 percent as well.

Gannett initially placed a bid for Tribune last month at $12.25/share. The company followed up with a $15/share bid in May, but both bids were rejected by Tribune’s board, which feels they are not in the best interest of shareholders.

Today, a person familiar with the matter told Bloomberg that Gannett’s board has been discussing dropping its bid for Tribune all together, although no final decision has been made.

The news sent Tribune’s shares tumbling briefly as low as $10.04 before they quickly recovered to above $11.

“It is evident from our discussions with Tribune shareholders that there is overwhelming support for the companies to engage immediately regarding our proposed transaction,” Gannett chairman John Jeffry Louis said last month.

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However, Tribune’s efforts to block the deal have been supported by three independent proxy voting and corporate governance advisory firms.

Tribune shareholders will vote on the issue at today’s shareholder meeting, and the outcome of the vote could determine whether or not Gannett will continue to pursue the deal.

Disclosure: the author holds n position in the stocks mentioned.