USA Today publisher Gannett is fending off an attack from MNG Enterprises, a hedge fund-backed media group notorious for slashing costs at its newspapers.
MNG, which owns and operates roughly 200 newspapers, submitted a hostile bid to acquire Gannett for $12 a share, or $1.4 billion, claiming Gannett is incapable of “effectively running” as a public company.
Gannett shares popped more than 20 percent, to $11.70, on MNG’s push for a sale. The stock has been under pressure since its public debut in 2015 and was down more than 41 percent through the end of 2018, MNG noted in its letter to Gannett’s board Monday.
The stock was gaining in recent days ahead of MNG’s offer.
Noting its reputation as a “consolidator and operator,” MNG, which is backed by hedge fund Alden Global, called out Gannett for its recent digital acquisitions and its pursuit of Tribune Publishing.
MNG, which also goes by Digital First Media, is also known for its acquisitive streak. It bought the Boston Herald out of bankruptcy for $11.9 million last year and snagged the Orange County Register and the Press-Enterprise out of bankruptcy in 2016.
The acquisitions and cost-cutting measures that followed attracted scorn.
Last year journalists carrying signs reading “Stop Bleeding Our Newsrooms Dry” protested outside of Alden’s New York offices after the MNG-owned Denver Post was forced to cut 30 newsroom jobs following years of layoffs and other cost-cutting measures, Bloomberg reported in May.
In Monday’s letter, MNG credited its “zero based budgeting and rationalization of labor costs”for delivering its “strong” balance sheet even when the industry is in “secular decline.”
Gannett confirmed receipt of the MNG offer an said it is reviewing it as is consistent with its fiduciary duties.
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