Gannett Signals Bid for Tribune Hinges on Shareholder Support

Gannett Co. is signaling it could abandon a bid to acquire Tribune Publishing Co. if not enough Tribune shareholders indicate their support for the proposed takeover at the company's annual meeting.

Gannett's statement follows a proxy advisory firm's recommendation that Tribune shareholders reject Gannett's push to get them to withhold votes for the Tribune board in June.

"Gannett will review whether to proceed with its acquisition offer following the results of the withhold vote and the Tribune Board's response to Gannett's $15 offer," the company said in a statement obtained by The Wall Street Journal ahead of its scheduled release on Monday.

On May 16, GannettÂ raised its unsolicited offer to $15 a share, double the price at which Tribune shares were trading before Gannett's initial offer was made public. Tribune's board had unanimously rejected the initial $12.25-a-share bid May 4, saying it undervalued the company, which publishes the Los Angeles Times and Chicago Tribune. It has yet to respond to the sweetened offer.

Gannett has asked Tribune shareholders to withhold their votes for the company's board at the annual meeting on June 2, as a way to send a message to the Tribune board that it is not acting in the best interest of investors.

On Saturday, shareholder advisory firm Institutional Shareholder Services issued a report recommending shareholders reject Gannett's efforts, saying the offer likely undervalued the company.

Tribune's second-largest shareholder, Oaktree Capital Management, last week urged the board to engage in talks, saying it had little confidence the company's new management team can achieve value equivalent to the Gannett deal. Oaktree said that remaining independent could "destroy enormous shareholder value."

Write to Lukas I. Alpert at lukas.alpert@wsj.com

(END) Dow Jones Newswires

May 23, 2016 00:25 ET (04:25 GMT)

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