Gannett flagship Los Angeles Times and Chicago Tribune: presented an offer from 815 million dollars – BBC

Do not stop the expansionist ambitions of Gannett in American local media market: the publisher USA Today (and other 107 local media in all the Member States, including the Des Moines Register , the Detroit Free Press and Cincinnati Enquirer ) submitted an offer from 815 million dollars (just over 720 million Euros) to buy Tribune Publishing, the owner group of eleven newspapers including decayed historical publications such as Los Angeles Times and Chicago Tribune . Gannett has offered $ 12.25 per share, a premium of 63% over the previous Friday’s in the bag: a price that would be equivalent to 5.6 times the EBITDA of Tribune Publishing planned for 2016, ie the income before taxes , interest, depreciation and amortization of assets. Initially presented on the phone and rejected by Tribune Group, the offer was made public to force his hand by the CEO of Gannett Robert Dickey, whose company also would place an outstanding debt of $ 390 million from last year. After the spin off company last June – by which he maintained the editorial operations but not those of broadcast – for the group based in McLean, Virginia, it would be the second acquisition: less than a month ago, the publisher bought for 280 million to the Journal Media Group, which prints the Milwaukee Journal Sentinel and the Commercial Appeal of Memphis .

the network of local titles Gannett

Al time of corporate demerger of last year, the CEO Dickey had exposed the strategy with which the group was planning to fight the collapse of advertising revenue: the goal of Gannett, confirmed the acquisition of the last and the present attempt month, it is to consolidate its position in the local media market. For this he has created USA Today Network, a network of widespread tested throughout the United States with a workforce of 3,800 journalists. “Tribune Publishing would help us to bridge different geographical gap,” Goodman said Dickey. “Their publications we would serve to strengthen the entire network ‘, which already can count on major metropolitan areas of the United States. According to Dickey, the acquisition would allow the two groups to save about $ 50 million a year thanks to synergies. “We believe that Tribune shares resolute commitment by Gannett for journalistic excellence and to achieve excellent content on every platform,” said Dickey. “Therefore, the union of Gannett and Tribune would bring together two largely complementary organizations with the shared goal of providing valuable content to readers and the communities we serve.”

the reorganization of Tribune Publishing

the same Tribune Publishing – which in 2015 reported a net loss of $ 2.8 million but he had concluded 2014 with profits of $ 42.3 million – had been subjected to a spin-off company in August 2014, with the company mother who had decided not to take more risks in the publishing market and to move on the broadcast. “Since the beginning of 2016, Tribune Publishing has undertaken significant organizational changes,” he stated in a statement the group, which has so far not wanted to open negotiations with Gannett. “With the right strategy and the right team, Tribune Publishing is well placed to create value for its shareholders,” he added.

The reaction of

“We are convinced that Gannett has the possibility of supporting Tribune Publishing and helping its historic titles aa survive and thrive in this difficult market,” Goodman said Dickey to his counterpart Justin Dearborn, CEO Tribune Publishing. “We are confident that the short-term and important liquidity premium convince the Tribune Publishing shareholders to accept our offer.” The letter, made public in the morning, he immediately warmed the markets that have reacted with enthusiasm. At mid-session, Tribune Publishing earns 52.66% to $ 11.48 per share, after increasing by 2.6% Friday and closing at $ 7.52 per share. Gannett also is growing on Wall Street of 5.99%, at $ 16.71 per share.