CHICAGO--(BUSINESS WIRE)--Tribune Publishing Co. (NYSE: TPUB) today announced that Institutional Shareholder Services Inc. (“ISS”), a leading independent proxy voting and corporate governance advisory firm, recommended Tribune shareholders vote “For” the majority of the Company’s directors and not support Gannett’s withhold campaign.
Tribune Publishing CEO, Justin Dearborn, commented, “We are pleased with the ISS recommendation which clearly acknowledges the thorough and appropriate nature of our Board’s response to Gannett and the value potential inherent in the execution of our strategic plan.”
In its report, ISS noted the following with regard to Gannett’s proposal1:
“The current offer of $15.00 in cash per share is a 99 percent premium to the unaffected closing price the day prior to Gannett first making its offer (at that point, $12.25 in cash per share) public. There is reason to believe, however, that the unaffected price may have materially underrepresented the intrinsic value of the company – which is a function of both the assets themselves and the management ability which leverages those assets to create greater value for shareholders.
“This set of facts, in aggregate, might suggest that the board has grounds for declining to engage on an offer with the eye popping premium to market…since the market price itself may not have fairly represented the intrinsic value of the company – let alone its prospects under the revised strategic plan being formulated by its new leadership.
“Whether that bid is in fact sufficiently compelling as a starting point for negotiations is also reasonably in doubt, given that even the improved bid is at or below the median EV/EBITDA multiple at which peers are currently trading. The favorability of the bid compared to the next-best alternative, remaining stand-alone under a new leadership and a new strategy, is also unclear, just three months in. Given these considerations it appears that the target board's response – which has been more extensive than merely saying "no" – appears to have been appropriate, leaving little reason, at this meeting, to believe withholding votes from directors, on the grounds Gannett has argued, is warranted.
“…Tribune's new CEO described a plan that appears to be both well thought-out and a significant departure from the company's previous course…The meaningful improvement in the company's adjusted EBITDA margins in Q1 2016 relative to the same period in 2015 suggests that the current efforts may be more effective than what preceded them.
“…the board – which had clearly been in the process of creating a new strategy, not only by bringing in a new chairman and a new CEO but also by refreshing five of its 8 seats in 2016 alone – has begun to lay out for investors the framework of the new strategy which, it contends, will deliver higher value under its new leadership than what the company's performance under the prior team would have suggested.”
Goldman, Sachs & Co. and Lazard are acting as financial advisors and Kirkland & Ellis LLP is acting as legal advisor to Tribune Publishing.
About Tribune Publishing:
Tribune Publishing Company (NYSE:TPUB) is a diversified media and marketing-solutions company that delivers innovative experiences for audiences and advertisers across all platforms. The company’s diverse portfolio of iconic news and information brands includes 11 award-winning major daily titles, more than 60 digital properties and more than 180 verticals in markets, including Los Angeles; San Diego; Chicago; South Florida; Orlando; Baltimore; Carroll County and Annapolis, Md.; Hartford, Conn.; Allentown, Pa., and Newport News, Va. Tribune Publishing also offers an array of customized marketing solutions, and operates a number of niche products, including Hoy, El Sentinel and VidaLatina, making Tribune Publishing the country’s largest Spanish-language publisher. Tribune Publishing Company is headquartered in Chicago.
Cautionary Statements Regarding Forward-looking Statements:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including, without limitation, statements regarding Tribune Publishing’s expectations regarding its strategic transformation plan. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “will,” “projections,” “continue,” “business outlook,” “estimate,” “outlook,” or similar expressions constitute forward-looking statements. Differences in Tribune Publishing’s actual results from those described in these forward-looking statements may result from actions taken by Tribune Publishing as well as from risks and uncertainties beyond Tribune Publishing’s control. These risks and uncertainties include competition and other economic conditions including fragmentation of the media landscape and competition from other media alternatives; changes in advertising demand, circulation levels and audience shares; the Company’s ability to develop and grow its online businesses; the Company’s reliance on revenue from printing and distributing third-party publications; changes in newsprint prices; macroeconomic trends and conditions; the Company’s ability to adapt to technological changes; the Company’s ability to realize benefits or synergies from acquisitions or divestitures or to operate its businesses effectively following acquisitions or divestitures; the Company’s success in implementing expense mitigation efforts; the Company’s reliance on third-party vendors for various services; adverse results from litigation, governmental investigations or tax-related proceedings or audits; the Company’s ability to attract and retain employees; the Company’s ability to satisfy pension and other postretirement employee benefit obligations; changes in accounting standards; the effect of labor strikes, lockouts and labor negotiations; regulatory and judicial rulings; the Company’s indebtedness and ability to comply with debt covenants applicable to its debt facilities; the Company’s ability to satisfy future capital and liquidity requirements; the Company’s ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms; and other events beyond the Company’s control that may result in unexpected adverse operating results. The Company’s actual results could also be impacted by the other risks detailed from time to time in its publicly filed documents, including in Item 1A (Risk Factors) of its most recent Annual Report on Form 10-K, in its Quarterly Report on Form 10-Q and in other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
1 Permission to quote from the ISS report was neither sought nor obtained.
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