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Report: Gannett increases offer to buy Tronc

Chicago Tribune
Gannett increases its offer to buy Tronc, parent company of Baltimore Sun Media Group.

Three months after its last offer was spurned, Gannett is reportedly back with an increased bid to buy Tronc, the Chicago-based newspaper chain formerly known as Tribune Publishing.

Tronc is the parent company of the Baltimore Sun Media Group, which includes The Sun, The Capital-Gazette, The Aegis, Howard County Times, Carroll County Times and other community publications.

Gannett left its rejected $15-per-share bid on the table since May, waiting for Tronc's second-quarter earnings, which were released Aug. 3.

Industry sources said last week that Gannett was conducting due diligence on Tronc in preparation for another potential offer. News of Gannett's new bid for an undisclosed price was first reported Wednesday night by The Wall Street Journal, citing unnamed sources familiar with the situation.

Tronc spokeswoman Dana Meyer declined to comment Thursday morning, as did Gannett spokesman Nick Lamplough.

The previous $15-per-share bid by McLean, Va.-based Gannett, publisher of USA Today and more than 100 other newspapers, valued Tronc at $864 million, including debt. Tronc Chairman Michael Ferro and the board rejected that offer, saying their plan for leveraging the digital assets of the legacy newspaper chain would bring more value to shareholders.

Tronc has rebuffed Gannett since an unsolicited $12.25-per-share offer was made public in April, adopting a "poison pill" approach to prevent a tender offer and force negotiations to run through the board.

Since then, shareholders have increased pressure on Tronc to negotiate with Gannett, with several lawsuits filed and a larger one looming. In June, investment firm Oaktree Capital Management, which owns roughly 13 percent of Tronc's shares, requested records to determine whether to initiate a shareholder derivative suit.

Tronc owns 11 major daily newspapers, including The Sun, Chicago Tribune and Los Angeles Times. The company spun off from Tribune Media in August 2014.

Ferro, a technology entrepreneur who previously owned the Chicago Sun-Times, became chairman of Tronc and its largest shareholder when his investment firm bought a 16.6 percent stake in February, a $44.4 million deal that priced the stock at $8.50 per share.

In June, Tribune Publishing was renamed Tronc — short for Tribune online content, the company's digital strategy — and its stock was moved from the New York Stock Exchange to Nasdaq.

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