Towle & Co a Major Shareholder of Tribune Urges the Publisher to Consider Gannett’s Deal
Tribune Publishing has earlier rejected offers from Gannett but this time another major investor is calling for Tribune to consider the deal with Gannett. The move comes only a couple of days after Gannett increased its offer to $864 million to acquire the company.
On Tuesday, in the letter sent to the board of Tribune, a St. Louis based investment firm, Towle & Co, said that Tribune which is the owner of the Los Angeles Times, the Chicago Tribune and other major dailies has abandoned its "responsibility of maximizing shareholder value" when it did not accept Gannett's offer.
Tribune stock was down fifteen percent to less than $12per share.
Last month, there was an unsolicited bid from Gannett for Tribune at $12.25 a share in cash which approximately placed the publisher at $815 million worth, in later developments, this month the company increased its offer to $15 a share which would make the deal approximately worth $864 million.
In a report, Glass Lewis & Co, a shareholder advisory firm said that shareholders of Tribune Publishing Co should not heed Gannett Co Inc's call to withhold votes for Tribune's board nominees when it has its annual shareholders' meeting on June 2.
The report published on Tuesday said "We believe Gannett has offered insufficient cause for investors to support its current campaign."
Gannett on the other hand missed the deadline of offering nominations for its own line up of directors.
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