Gannett offers $815 million to buy Tribune Publishing

Gannett Co., which owns USA TODAY and more than 100 other media properties across the country, said it offered to buy Tribune Publishing for about $815 million, its second big expansion move since spinning off from its former parent less than a year ago. In a letter to Justin Dearborn, CEO of Tribune, which owns the Los Angeles Times, Chicago Tribune and nine other dailies, Gannett CEO Robert Dickey reiterated a private April 12 offer to pay $12.25 per share, a 63% premium to Tribune’s closing stock price on April 22. Gannett’s deal includes assuming $390 million of Tribune’s debt outstanding as of Dec. 31, 2015.

The offer price is about 5.6 times Tribune’s estimated 2016 earnings before interest, taxes and other items (EBITDA). Gannett estimates about $50 million a year in “synergies” savings. Gannett owns USA TODAY plus 107 local news organizations including the Detroit Free Press, Cincinnati Enquirer, Des Moines Register, the Milwaukee Journal Sentinel and Arizona Republic. Shares of Tribune closed April 22 at $7.52, up 2.6%, and shot up 58% to $11.84 in early trading April 25.