Author: Philana Patterson / Source: USA TODAY
Gannett Co. said Monday that its board has unanimously rejected an unsolicited proposal to be acquired by media company MNG Enterprises Inc., also known as Digital First Media, saying the proposal undervalues the company and the board doesn’t believe the offer is credible.
MNG on Jan. 14 offered to buy Gannett for $12 a share in cash, which at the time was a 23 percent premium above its most recent closing price of $9.75 a share. Gannett shares rose as high as $11.99 a share on Jan. 14, but closed Friday at $11.22.
“After careful review and consideration, conducted in consultation with its financial and legal advisers, the Gannett board concluded that MNG’s unsolicited proposal undervalues Gannett and is not in the best interests of Gannett and its shareholders,” the company said in statement. “In addition, Gannett does not believe MNG’s proposal is credible.”
Gannett said that in response to the Jan. 14 offer it sent a letter to MNG offering to arrange a meeting between representatives of both companies, including two of Gannett’s independent directors. In the letter, Gannett posed questions that included how MNG would finance the deal, what MNG’s view on antitrust concerns was, and what its approach would be to newsroom staffing and pension obligations. Gannett said MNG’s response was to require a non-disclosure agreement, or NDA.
“An NDA is not a prerequisite for MNG to explain how it intends to finance and close the transaction MNG itself proposed,’’ Gannett said in its Monday press release announcing the rejection of the hostile bid. “Without such basic information, neither Gannett nor any other company in Gannett’s position would disclose sensitive, confidential information to MNG. While Gannett invited MNG to provide written responses at a level of detail that would not have required MNG to disclose confidential information, MNG still has not provided any more information about how it would execute on its proposal.”
“In light of this, Gannett now questions MNG’s motives and can only conclude that the proposed NDA is a distraction designed to mask MNG’s inability to finance and complete the proposed transaction,” the company said. “Indeed, given MNG’s refusal to provide even the most basic answers to Gannett’s questions, it appears that MNG does not have a realistic plan to…
The post Gannett rejects takeover offer from MNG/Digital First Media appeared first on FeedBox.