A financial advisor retained by Gannett in a $1.36 billion takeover bid is circulating an analysis by an independent equity research firm that says the price offered by MNG Enterprises/Digital Media First is too low.
“The majority owner of MNG is Alden Capital which has a long history with Gannett. It’s opportunistic given the stock was battered during the market’s December sell-off and the CEO as well as head of digital sales have both announced they are leaving (CEO is retiring),” wrote Huber Research Partners. “Our bottom line is that the proposed price is not high enough; a 7.5% ownership position or under $100 mm based on Friday’s close, is not serious, in our view.”
The report was distributed by Joele Frank, which works for Gannett.
“MNG is not exactly a heralded steward of print assets. Alden has a controversial reputation in the newspaper business and is known for aggressively slashing staff (media sources refer to the strategy as strip-mining), selling off real estate and otherwise attempting to seemingly run papers until the very last iota of cash flow has been squeezed from it,” the analysis said. “We believe, while Underweight, GCI is on the right path with its digital growth push and legacy cost cuts.”Huber Research