According to the FT the hedge fund-backed US newspaper group known for hollowing out American newsrooms in its pursuit of cost cuts has proposed a takeover of USA Today owner Gannett, valuing the company at $1.4bn.
MNG Enterprises, which is controlled by New York investment fund Alden Global Capital, has offered Gannett stockholders $12 a share to purchase the company outright. The proposal represented a 23 per cent premium to Gannett’s closing share price on Friday of $9.75.
A letter sent to Gannett’s board of directors by MNG today said Gannett had “suffered from a series of value-destroying decisions made by an unfocused leadership team” since it went public two and a half years ago.
It urged Gannett to enter into discussions with MNG about a strategic combination, hire an investment bank to conduct a review of strategic alternatives, including a potential sale, commit to a moratorium on digital acquisitions and to a “feasible, strategic and financial path forward” before hiring a new chief executive to replace Robert Dickey, who retires in May.
MNG said that, “unlike other potential buyers”, it was a “proven operator in the newspaper business” and was able “to provide a home for the company’s businesses and valued employees so they can continue to serve their local communities”.
The publisher added: “MNG has invested in Gannett because we see significant value in Gannett’s assets, particularly its core newspaper business.
“However, Gannett has been moving in the wrong direction, resulting in a declining stock price and lack of confidence that the board and existing management are willing and able to take the steps necessary to turn the company around.”