Tag: MNG

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Fly On The Wall Blog Opinion

Gannett Shareholders Reject MNG Nominees, Avoiding Takeover For Now

UPDATE: Gannett/Tribune merger talks?

There’s some fairly good news for people who care about the information industry.

In an act of relative sanity, Gannett shareholders have — at least temporarily — turned back MNG/Alden Global Capital’s attempted hostile takeover. For Memphians, that means The Commercial Appeal avoided falling into the fire of hedge-fund ownership, though it remains a frying pan heated by economic pressure, and hedge-fund created trends. In the short run, it means we won’t lose the city’s historic paper of record, giving the newly right-sized and relocated newspaper an opportunity to claw its way back to relevance.

Beyond the actual vote, what followed was like a conversation from fantasy land.

Via USA Today:

Gannett Chairman [John Jeffry] Louis said the company is “laser focused on transformation” and is successfully transitioning to a business model that “positions the company to thrive in the digital future.” 

Settle down Flash Gordon! The laser-wielding chairman muddles issues and arguments, in ways a good debate team might challenge, but he’s at least partly correct. Only significant digital growth isn’t reclaiming segments of lost readership, and nothing is keeping pace with losses in traditional models where the bedrock of local news is going to pieces. Newspapers have been cutting their way to “sustainability” for decades now, and as a result, the products look like chemo patients, taking a cure that’s also killing them. Hopes and prayers go out in the form of stories about AI, digital inevitability, and an abiding belief that we’ll be saved by the same kinds of disruptions that brought us to this apocalyptic prom date.

Meanwhile, comments from MNG — a company famous for its community-be-damned, slash-and-burn roadmap to double-digit profits — read like broadcasts from Bizarro world.

Via USA Today:

“This is a win for an entrenched Gannett Board that has been unwilling to address the current realities of the newspaper business, and sadly a loss for Gannett and its shareholders,” MNG said in a statement. “Gannett’s newspapers are critical local resources, and we hope that Gannett’s incumbent Board and Management shift course to embrace a modern approach to local news that will save newspapers and serve communities. That would be the best outcome. If Gannett’s Board does not shift course from overpaying for non-core, aspirational and dilutive digital deals, we believe the stock will drop further.”

HA! That’s rich stuff right there. Though, who’s to say in regard to the final prediction.

For the moment, Memphis is a two-daily-newspaper town. Though, one — The Daily Memphian — doesn’t exist in paper form. That’s weird, right? And it feels like it should be awesome. Though, between intrinsic, probably unavoidable redundancy in beats, it’s difficult to measure at the moment just how much more is being covered or how much more audience is reached and influenced as a result.

Branding matters. The force with which any story lands is determined, in part, by reach, and the strength of certain social bonds. There’s historic erosion in both these areas and recent redundancies.

SB 30 Episode 9: Chris Davis of the Memphis Flyer

For our show April 28, we sat down with journalist Chris Davis of the Memphis Flyer and took an in-depth look at the current landscape of the print newspaper and how we got here, based in part on Chris’ great reporting for his Flyer series Justice in Journalism, and his March 14, 2019 story ‘Going to Pieces’ (link below).

Gannett Shareholders Reject MNG Nominees, Avoiding Takeover For Now (2)

If one cares to indulge in fantasy, (as executives at Gannett and MNG clearly do) it’s not that hard to picture a positive result from the almost certain disaster of MNG control. If the CA underperformed, it might be sold off locally, and relatively cheaply. Once upon a time interests behind The Daily Memphian wanted to pull off just that kind of ownership transfer, so it’s not completely insane to picture some kind of triumphant restoration, with lost employees returning to old beats in new digs. Like, I said — fantasy. It’s not entirely unprecedented but, as is the case with  most genie wishes, there’s a price.

Like one friend on social media said, “One-and-a-half cheers for the less bad guys!” That’s about right.  But I’m also reminded of Avengers: Infinity War when Drax the Destroyer tells Star-Lord he’s a sandwich away from being fat. Newspapers are priced to flip these days, and now that it’s been looted, the CA is one disruption away from whatever comes next.

via GIPHY

Gannett Shareholders Reject MNG Nominees, Avoiding Takeover For Now

One sentence summary: Gannett, and Memphis dodged a bullet, but the gun’s still loaded. 

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News News Blog

Gannett: MNG Trying to “Derail Our Progress”

Gannett Co., owner of The Commercial Appeal, urged its shareholders Wednesday to vote for its slate of board candidates to stave off a hostile takeover from rival media company, MNG Enterprises.

MNG is backed by the Alden Global Capital hedge fund and is also known as Digital First Media. MNG recently sent Gannett an unsolicited offer to buy the company for more than $1 billion. Gannett board members rejected the offer.

MNG later offered up a slate of candidates to run for Gannett’s board, a move to take control of the company and, apparently, force the sale of the company to MNG.

The final vote on those candidates is slated for Gannett’s annual shareholder meeting on May 16th. On Wednesday, Gannett sent a letter to shareholders touting the experience and expertise of its nominees.

Gannett criticized MNG’s slate. It said MNG is “attempting to derail our progress and take control of Gannett.”

“In contrast to Gannett’s eight independent nominees, all of MNG’s nominees have irreconcilable conflicts of interest given their close affiliations with MNG and/or Alden – and in some cases their fiduciary duties to MNG and Alden,” reads the letter.

Touting its own slate, Gannett pointed to its board’s actions to build a “best-in-class digital marketing solutions organization and local-to-national news network that have driven growth in digital subscribers, audience engagement, and advertising and marketing services revenues.”

Here are some of the numbers Gannett listed as signs of its growth:

• Growing digital subscribers by 46 percent, bringing total paid digital-only subscribers to over 500,000.

• Growing ReachLocal revenues by 15 percent.

• Growing national digital advertising revenue by 19 percent and transforming USA Today’s advertising revenue to be 75 percent digital.

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Gannett Still Skeptical on $1.8B MNG Deal as Takeover Threat Looms

Gannett Co. leaders said they remain skeptical of MNG Enterprises’ $1.8 billion offer to buy the newspaper company after a meeting late last week.

MNG made an unsolicited offer to buy Gannett, the corporate owner of The Commercial Appeal, last month for $12 per share, or $1.8 billion. Gannett leaders said they first learned of the offer in a story in The Wall Street Journal. Gannett leaders rejected the offer a week ago, claiming MNG failed to provide details on financing the deal, antitrust issues, and more.

MNG, a company also known as Digital First, is owned largely by a New York hedge fund, Alden Global Capital. Digital First operates The Boston Herald and The Denver Post, according to USA Today. MNG owns a 7.5 percent stake in Gannett. 

Leaders from both companies met on Thursday, according to a news release from Gannett Monday morning, to hammer out details. But the information given in that meeting was “deficient” and did not convince Gannett leaders, the newspaper company said.

“We are disappointed that at the meeting on February 7, MNG again failed to provide substantive answers to the basic questions Gannett has repeatedly raised,” Jeffrey Louis, Gannett’s board chairman, said in a statement. “Instead, MNG offered vague and generic statements that further confirmed the board’s decision to reject MNG’s proposal.”

Here are some details from the meeting, according to Gannett:

• MNG said it would fund the deal with debt financing.

• MNG had not secured the financing, nor had it contacted potential financing sources.

• MNG offered ”vague assurances” and said that it is not concerned about antitrust issues.

• MNG said the transaction would be a merger, “not the acquisition proposal that MNG had previously put forth.”

“Despite being afforded every opportunity to provide Gannett with specifics related to these important matters, [R. Joseph Fuchs, executive chairman of MNG] refused to provide any substantive, actionable evidence of a credible proposal,” reads a Gannett statement.

POSSIBLE HOSTILE TAKEOVER

During a break in these talks, MNG told Gannett leaders that the company intends to nominate six MNG-affiliated candidates to Gannett’s board of directors during the next shareholder meeting. That board will shrink to nine members during that meeting. Filling the board with MNG candidates could amount to a hostile takeover of the company.

“Gannett believes MNG’s clearly conflicted nominees are not in a position to fairly, and in a disinterested way, evaluate and advise Gannett shareholders on MNG’s proposed transaction,” reads a Gannett news release.

Three of the MNG candidates my not be legally capable of serving on the Gannett board, Gannett said, given their roles at MNG. Another, the 78-year-old Fuchs, exceeds Gannett’s mandatory retirement age for board members.

”MNG’s acknowledgement that these nominations are indeed intended to advance its efforts to acquire Gannett further underscores the proposed nominees’ clear and irreconcilable conflicts of interest and inability to satisfy fiduciary responsibilities to all Gannett shareholders,” said Louis.

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Fly On The Wall Blog Opinion

Sick Burn — Gannett: MNG “Not Credible”; MNG: “Gannett’s not Believable.”

Is it just me or is reality bending to look more like reality TV all the time?

In case you missed the news, Gannett has rejected a “vulture capital” firm’s proposal to acquire the USA Today newspaper network and parent company to The Commercial Appeal.

Not only did Gannett reject MNG/Digital First Media’s proposal, they also characterized the deal as being “not credible.” That’s not a complete surprise since the deal’s prospects have ranged from “who knows?” to “it’s all a sham” since it was announced and the market voiced its soulless approval.

“Buying Gannett is a tall task…I’m not sure Alden can get the financing to buy Gannett,” a media banker told The New York Post last week. The Post‘s story went on to note, “In fact, sources say that MNG’s ambition for years has been to be acquired by Gannett — and some speculate that friendly talks have already begun.”

TWIST!

But Gannett’s rejection was unsubtle: “Indeed, given MNG’s refusal to provide even the most basic answers to Gannett’s questions, it appears that MNG does not have a realistic plan to acquire Gannett.” Shortly after the announcement MNG took its beef live.

Via ADWEEK:

MNG said in a statement that Gannett was the one to set up roadblocks to the discussion, which demonstrated that it was “not interested in seriously evaluating our premium cash proposal.”

MNG went on to say that Gannett’s plan for its digital businesses was “pie in the sky” and “not believable.”

This is in keeping with previous disses from Alden Global Capital, the hedge fund behind MNG/Digital First, which had previously released statements dogging “the team leading Gannett” for having, “not demonstrated that it’s capable of effectively running this enterprise.”

“The Death Star of Newspaper Chains,” as  MNG had been called, still publicly insists that Gannett overpaid for digital assets and is currently “presiding over a declining core business,” and cash flow. “Gannett’s deep structural problems are better fixed by experienced operators such as MNG,” MNG concluded.

Maybe this is all over now. Sniping happens when mergers loom. Still, it would make better television if, as the New York Post and Nieman Lab have considered, all this shit talk was just Alden Global secretly hoping to get with failed Gannett so the so called “pie in the sky” company could manage its newspaper properties too.    

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News News Blog

Gannett Rejects MNG Purchase Deal

CREDIT: Justin Fox Burks

Justin Fox Burks

Gannett Co.’s board of directors unanimously rejected MNG Enterprises’ offer to buy the company, calling the proposal “not credible” and saying it undervalued Gannett.

MNG proposed buying the newspaper company, owner of The Commercial Appeal, earlier this month, in an unsolicited deal worth $12 per share. The move left many to worry that the company would lay off even more staff at Gannett papers to drive profitability.

But Gannett board chairman Jeffry Louis said the board is optimistic about the company’s future and its digital strategy.

“Our board of directors is confident that Gannett has significant value creation potential,” Louis said in a statement. “Our vision and pursuit of our digital transformation, combined with our USA Today Network strategy, enables us to serve more directly and efficiently the persistent demand of our audiences and customers to engage with their communities.

“We believe that our future — and that of the industry — turns on thoughtful investments in journalism and marketing solutions, so we can deliver engagement when, where, and how our audiences and customers demand it. Delivering on this purpose will deliver value to our shareholders and benefit the communities we serve.”

“We know there are challenges that face us and our industry. We firmly believe, however, that given our operational expertise, our focus on evolving our business model, and our unwavering commitment to remaining a trusted source of news, we are uniquely positioned to grow this company and its valuable assets.”
[pullquote-1] A news release from Gannett early Monday morning provided some interesting details of the deal proposed by MNG. The company’s actions — before and since its public proposal — “suggest that MNG’s proposal is not credible,” according to Gannett.

MNG did not talk to Gannett officials before a story of the offer appeared in The Wall Street Journal. Gannett received a letter from MNG a day after the story ran, even though “MNG and Gannett management are well known to one another and in fact are partners in significant operations.”

MNG did not give Gannett any information on how it would finance the deal and “failed to address potential regulatory risks and other fundamental issues that Gannett considered important.” Gannett leaders did meet with MNG officials but left with unanswered questions.

“Gannett posed questions to MNG that are routinely addressed by someone making a credible, public, unsolicited takeover proposal: Can MNG fund it? Can MNG close it?” according to Gannett.
[pullquote-2] Without the information, Gannett leaders said they felt uncomfortable signing a non-disclosure agreement with MNG. Gannett said they asked for written responses to questions that would not have required MNG to disclose confidential information. But MNG would not give them any more information about how it would execute the deal.

“In light of this, Gannett now questions MNG’s motives and can only conclude that the proposed nondisclosure agreement is a distraction designed to mask MNG’s inability to finance and complete the proposed transaction,” reads Gannett’s news release. “Indeed, given MNG’s refusal to provide even the most basic answers to Gannett’s questions, it appears that MNG does not have a realistic plan to acquire Gannett.”