Gannett Co, which is the owner of the USA Today and over 100 other publications across the nation, announced on Monday that it had sent an offer of close to $815 million to acquire Tribune Publishing.
This is the second big move to expand since it spun off from its former parent less than 12 months ago.
In a letter addressed to Tribune CEO Justin Dearborn, Robert Dickey the CEO at Gannett reiterated on Monday a private offer from April 12 to pay per share an amount of $12.25 or a premium of 63% to the closing stock price of Tribune as of last Friday.
Tribune is owners of the Chicago Tribune, Los Angeles Times and nine more dailies.
The deal offered by Gannett includes the assumption of over $390 million of debt Tribune has outstanding as of December 31 of 2015.
The offering is 5.6 times the estimated earnings for Tribune for 2016 prior to interest, taxes and others or the EBITDA.
Gannett has estimated that it would have synergies savings of approximately $50 million per year.
Gannett owns 107 local news groups as well as the USA Today newspaper. A partial list of their news organizations includes the Des Moines Register, Cincinnati Enquirer, Detroit Free Press and the Arizona Republic.
Dickey stated during an interview that since his original offer, he has had a number of telephone conversations with Michael Ferro the non-executive chairman at Tribune as well as Dearborn. However, the letter says that Tribune refused to start any formal negotiations, which prompted Dickey to take the bid public.
Dickey said that Gannett hopes to sit with the board of Tribune and work out this transaction. He added that he was confident, with the cooperation of the two companies, full due diligence could be completed in a timely fashion and an agreement executed.
Tribune shares closed on Friday up 2.6% and on Monday in trading prior to the opening bell shot skyward by 54%.
On Monday, Tribune said that its board was now engaged with advisors’ assistance, was committed to acting in the shareholders’ best interest and would respond to Gannett in a timely fashion.