Gannett has officially rejected a nearly $1.4 billion takeover offer from MNG Enterprises — more commonly known as Digital First Media. The decision from Gannett’s board of director’s was unanimous.
“After careful review and consideration, conducted in consultation with it financial and legal advisors, the Gannett board concluded that MNG’s unsolicited proposal undervalues Gannett and is not in the best interests of its shareholders,” the company said in a statement. “Gannett does not believe MNG’s proposal is credible.”
In a statement in response, Digital First said that Gannett has lost a significant chunk of its value in the last year and charged that the company leadership “has no credible plan” going forward. “Gannett’s long-suffering shareholders cannot afford to wait any longer,” it said.
The proposal which emerged last month would have offered the struggling newspaper empire $12 a share, a premium on the company’s current stock price of roughly $10.80 per share. Digital First already owns a 7.5 percent stake in Gannett which will remain unchanged.
Gannett, which publishes USA Today and dozens of other local papers across the country, has struggled in recent years against digital headwinds which have affected the broader publishing industry. Last month, the company slashed jobs from across its titles in a week which also saw layoffs at BuzzFeed and HuffPost. Vice Media and McClatchy have also followed with hundreds of layoffs of their own last week.
Outcry ensued almost immediately after news of Gannett’s possible acquisition by Digital First was reported in the Wall Street Journal in January. The hedge fund-backed media company has become known for purchasing struggling newspapers and then strip-mining them of assets and talent — frequently with deep layoffs. The most famous example is the Denver Post, whose newsroom has suffered such extensive decimation that remaining staff publicly rebuked their corporate overlords in an editorial.
“Digital First Media’s hedge fund owner slashes local newsrooms to the bone, soaks them for profits and then spends money on things that aren’t journalism,” warned Los Angeles Times national correspondent Matt Pearce. “If they’re knocking on the door, you should lock the deadbolt.”