Gannett has rejected Digital First Media’s $1.4 billion purchase offer, saying the bid undervalues their company, according to a Wall Street Journal report.
Digital First Media, which is backed by a New York hedge-fund, had offered $12 per share in cash for Gannett, which owns a national chain of newspapers, including eight New Jersey dailies: The (Bergen) Record, the Asbury Park Press, the Courier News, the Courier-Post, the Home News Tribune, the Daily Record, the Daily Journal, and the Herald News
Gannett had signaled on January 14 that they thought the offer was too low. Shares in the company had increased following the takeover bid but ended Monday at $10.97. Gannett stock declined by 26% in 2018.
Digital First Media has a history of purchasing struggling newspapers and cutting costs by dramatically reducing the number of journalists.
They claim Gannett has lost a large portion of its value and that their board lacks a credible plan to restore that value and instead is blocking a premium, the Wall Street Journal reports.
Digital First said Gannett has lost a significant amount of its value, its leadership doesn’t have a credible plan to restore that value and it is trying to block a premium deal. It added that it has no impediments to completing the transaction. Gannett’s stock dropped 26% in 2018.
Gannett told the Wall Street Journal that Digital First lacked specifics on how they would finance the purchase and did not adequately address potential regulatory challenges.
Since confirmed the takeover plan on January 14, The Record has laid off six more employees.
None of the New Jersey Gannett newspapers have acknowledged the proposed sale to their readers.