Oaktree Capital urges Tribune to pursue Gannett's acquisition offer

Tribune Publishing's second-largest shareholder, Oaktree Capital Group, yesterday urged the media company to "pursue discussions" with Gannett Co Inc, over its $815-million hostile acquisition offer.

Specifically, the asset manager, which holds a 15-per cent stake in Tribune Publishing, said in a Securities and Exchange Commission filing that it would be in the best interest of Tribune Publishing's shareholders to pursue discussions with Gannett, owner of the USA Today and over 100 other newspapers, to see if the two media companies could reach an acceptable agreement.

The securities filing follows the rejection by Tribune Publishing on Wednesday of the Gannett offer.  Gannet had last month, made an offer to acquire the company even though on the same day it posted a $6-million loss for the first quarter.

Additionally, Gannett on Monday launched a "just vote no" campaign calling on shareholders to oppose Tribune Publishing's eight incumbent director candidates in an effort to bolster unsolicited bids.

The vote, which is set for 2 June at Gannett's annual meeting, will have no binding impact on Tribune Publishing's management or board. According to commentators, the unusual tactic was intended to demonstrate that shareholders wanted the two sides to engage in discussions about a combination.

Chicago-based Tribune Publishing rejected Gannett's offer this week, saying its board unanimously decided the $12.25-a-share proposal was a low-ball bid.

"We think there's going to be a transaction, and we think it's going to be significantly ahead of the $12.25 price,'' said CRT Capital analyst Lance Vitanza, who values the company at $18 a share,www.chicagobusiness.com reported. The stock which closed at $11.61 yesterday, lost over half its value since hitting a high of $25.50 last year.

In a statement, Tribune Publishing said, ''While the company is not for sale, the board is always open to evaluating any credible proposal that it reasonably believes, in good faith, to be in the best interests of the company and its shareholders. As previously disclosed, the board evaluated the Gannett proposal and concluded that it understates Tribune's true value and is not a basis for further discussion.''