Belo Investors to Vote Against Deal

Investor opposition to the terms of Gannett’s $1.5 billion takeover offer for TV station-owner Belo is intensifying, two weeks before Belo shareholders are due to vote—putting a spotlight on the question of whether Belo should have put itself up for a broader auction.

Pine River Capital Management, a Minnesota-based hedge fund that disclosed a 6.6% stake in Belo, said it planned to vote against the deal, as currently structured, arguing that the $13.75-a-share Gannett agreed in June to pay is less than Belo is worth. Taking into account supervoting shares owned by others, Pine River's voting stake is equivalent to 3.6%. Pine River is one of a number of hedge funds that bought up Belo's stock largely after the deal and plan to vote against the transaction or have significant concerns about its terms, according to people familiar with the matter. The amount of opposition isn't clear. Belo shareholders representing 42.5% of the company's voting power have committed to support the deal. Two-thirds of all shares outstanding have to vote in favor—votes not cast count against, according to Belo's filing. Additionally, Fairpointe Capital, which owns 6.1% of Belo's shares and has 3.3% of its voting power, owns both Belo and Gannett shares and is happy with the deal, according to Thyra Zerhusen, manager at Fairpointe.