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LA Times owner reviews uninvited bid

BBC News BBC News 25/04/2016
Los Angles Times © Getty Images Los Angles Times

LA Times owner, Tribune Publishing, is reviewing an uninvited offer to buy the company from media firm Gannett.

Gannett, owner of USA Today, made an offer of $815m (£563m) earlier this month.

Tribune's board said it would review the offer and its "numerous contingencies" and would "respond to Gannett as quickly as feasible."

But in a statement Gannett said Tribune had refused to "engage in a dialogue" about that offer.

"We therefore are prepared to consider all alternatives to complete this transaction," wrote Gannett chief executive Robert Dickey in a letter to Tribune Publishing's board.

Gannett has offered to pay $12.25 per share in cash for Tribune as well as absorb $390m of Tribune's debt.

It has been working to expand its ownership of regional US newspapers. Earlier this month, Gannett purchased the Journal Media Group, owner of the Knoxville News Sentinel and the Milwaukee Journal Sentinel.

Meanwhile, Tribune Publishing, which owns 11 major US newspapers including the Chicago Tribune, The Baltimore Sun and Hartford Courant, has been struggling with falling revenue. It reported a 2.1% drop in its 2015 to $1.67bn.

Since the start of the year the company said it had "made significant organizational changes". In February, Tribune named Justin Dearborn as its new chief executive and appointed the editors of each of its newspapers as dual editors-in-chief and publishers for their paper.

The publisher also accepted a $44m cash infusion from a Chicago based fund run by Michael Ferro.

Gannett said it reached out to Mr Ferro to discuss the deal.

"Tribune in some degree has been in disarray with the recent management changes and the company has been slow to implement its digital strategy," Michael Kupinski, an analyst at Noble Financial Capital Markets told Reuters news agency.

Tribune's shares ,which have halved in value over the last nine months, were up 57% on Monday.

Gannett's shares rose 3.2%.

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