TribunePublishing Co. has adopted a poison pill in an attempt to thwart apossible hostile takeover by Gannett Co Inc.
Under the terms of a one-year shareholder rights planadopted by the board, should a person or group attempt to acquire 20% or moreof Tribune's shares, it will trigger the exercisability of certain rights forall other shareholders under which the holder is entitled to receive a numberof Tribune shares with a market value of twice the exercise price of thedistributed rights. The rights will be exercisable 10 days after a person orgroup acquires or announces an intention to acquire 20% of more of Tribune'sshares.
The Tribune board said it adopted the plan "to deterany attempt to obtain control of the company in a manner or on terms that arenot in the best interest of shareholders."
"Based on Gannett's approach and continued hostility,the board is taking prudent measures to protect our shareholders' bestinterests," Tribune CEO Justin Dearborn said in a May 9 statement.
Gannett on April 12 made an unsolicited to acquire all the outstandingcommon shares of Tribune for $12.25 per share in cash. On May 4, TribunePublishing's board unanimously rejected the offer, which it said was too low.However, at least one prominent Tribune shareholder has the company to engage in potentialsale discussions with Gannett and any other interested parties.
"The board believes in the strategy outlined shortlybefore Merrick Media invested in — and Michael Ferro Jr. and Justin Dearbornjoined — the company only 12 weeks ago to transform Tribune into a technologyand content company," said Eddy Hartenstein, director and chairmanemeritus of the company, in a statement. "The entire publishing industryhas been turned upside down over the last few years and we believe in givingthe team a reasonable period to execute on the compelling vision they havearticulated. The board's decision to implement a rights plan will protect ourshareholders from Gannett's attempt to steal Tribune before that value can berealized."
Goldman Sachs & Co. and Lazard are acting as financialadvisors and Kirkland & Ellis LLP is acting as legal advisor to TribunePublishing.