Gannett (GCI) said Tuesday it is ending its pursuit of Tronc (TRNC), the publisher and parent company of the Chicago Tribune and the Los Angeles Times, the company said Tuesday.
After a long battle to engage in discussions to expand its newspaper presence, Gannett said that it has determined to not pursue an acquisition of the Chicago-based publisher any longer. Gannett is one of the largest newspaper publishers in America with notable brands like USA Today, The Arizona Republic and The Indianapolis Star.
As a result, Tronc shares are tumbling on Tuesday morning, falling 15% in response to the news that was released this morning. Gannett shares are up 0.3%.
Tronc, formerly Tribune Publishing, fought the acquisition talks from Gannett, mainly led by its chairman Michael Ferro, a tech mogul who bought a key stake at what was then Tribune Publishing earlier this year.
The conversations were put into doubt in late October after a Bloomberg report said banks were withdrawing their financing for Gannett’s takeover bid, citing unnamed sources. The banks were reportedly weary about the companies’ agreed valuation of $18.75 per share.
Tronc said in a statement it learned about Gannett’s decision to “abruptly” halt merger discussions on Tuesday morning. The companyies agreed on a purchase price in mid-September and Tronc had been waiting for Gannett to raise the funds after last week it told the company it had encountered delays in getting the money together.
“As noted previously, tronc had serious doubts about Gannett’s ability to finance a transaction that was in the best interest of tronc’s shareholders and other stakeholders,” it said. “Nonetheless, over the past several months, the tronc Board, management team and their advisors engaged in substantive discussions and due diligence with Gannett regarding a potential transaction.”
Trinc said it will focus on taking all the necessary steps to transform its business “in response to the massive changes that have overtaken the publishing industry.”