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Fate of board nominees to be revealed

Fate of board nominees to be revealed


Fate of board nominees to be revealed


Gannett’s effort to fend off a hedge fund-controlled newspaper company’s hostile takeover attempt will reach a pivotal moment Thursday as shareholders determine the board members who will lead the company for the next year.

The owner of USA TODAY and more than 100 other publications will hold its annual shareholder meeting Thursday, culminating in the preliminary results of a vote on nominees to its board of directors.

New York hedge fund Alden Global Capital’s MNG Enterprises, which has also operated as Digital First Media, made an unsolicited attempt to buy Gannett in January and has nominated three people to join the company’s board.

Gannett has rejected the offer and recommended against MNG’s board nominees. The company has argued that it has an achievable roadmap for a digital transformation, MNG’s offer was not credible and MNG’s nominees have conflicts of interest.

Both companies have spent the last few months trying to convince investors to vote on their behalf.

MNG proposal implications: Gannett says MNG’s proposed deal would be overloaded with debt

History of talks: Gannett says Digital First Media first floated possibility of selling itself to Gannett

Expect the results of the vote to be revealed sometime after the meeting, which is scheduled to begin at 8:30 a.m. ET. 

Here’s what to know:

What’s the status of MNG’s offer?

Gannett has rejected MNG’s $12-per-share offer and fought the company’s board nominees, so it would be a surprise if they suddenly made a deal. Plus, MNG’s ability to finance the deal has been called into question by stockholder advisory firms Institutional Shareholder Services and Glass Lewis.

That said, ISS and Glass Lewis have concluded that a legitimate, well-financed offer for Gannett at $12 would be a good starting point for discussions. 

The company already owns about 7.5% of Gannett.

Who’s nominated for Gannett’s board?

Gannett has nominated eight members for reelection: chairman John Jeffry Louis, John E. Cody, Stephen Coll, Donald Felsinger, Lila Ibrahim, Lawrence S. Kramer, Debra A. Sandler and Chloe R. Sladden.

MNG has nominated three members: former MNG CEO Steven Rossi, Cogent Group Principal Dana Goldsmith Needleman and Alden President and MNG Vice Chairman Heath Freeman.

ISS backed Rossi but did not endorse the other two. Glass Lewis did not endorse any of MNG’s nominees.

MNG had previously nominated six people to the board but withdrew three amid mounting scrutiny of Alden’s track record of cuts and investment miscues.

Which members of Gannett’s board is MNG seeking to oust?

MNG is opposing the reelection of three Gannett board nominees, including the two Gannett board members with the most direct journalism experience: Coll, the dean of the Columbia University Graduate School of Journalism and a two-time Pulitzer Prize winner; and Kramer, who currently serves as chairman of business news service TheStreet and who formerly served as publisher of USA TODAY and founder and CEO of MarketWatch.

MNG is also opposing former Broadcast Music Inc. executive Cody.

What would MNG do?

If MNG wins any seats on the board, it could use them to agitate for change at Gannett and possibly promote a deal between the two companies. MNG executives have suggested a tie-up in the past.

The company told U.S. Sen. Chuck Schumer, a Democrat from New York, in a letter that if it acquired Gannett, it would “right size overhead costs” and consider consolidating of facilities with “a strategic focus on economic realities.”

The company has also criticized Gannett’s recent investments in digital revenue. Gannett executives have defended their strategy of investing in digital enterprises, saying that it’s critical to the company’s future.

What is the track record of Alden and MNG?

MNG has a track record of implementing steep cuts at its newspapers, such as The Denver Post and San Jose Mercury News.

Alden has also had a recent run of poor investments, including Payless ShoeSource and Fred’s Inc., two retailers that have launched major store closings.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.


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