Oaktree renews call for Tribune to sell to Gannett
Investment firm Oaktree Capital Management is still pushing for the parent of the Los Angeles Times to sell to Gannett Co., sending a stinging letter Friday that indicates it has no confidence in Tribune Publishing’s current board and management.
In the letter, Oaktree, Tribune’s third-largest shareholder, asked the company to set up an independent committee to consider Gannett’s buyout offer of $15 a share, a deal the board rejected last month.
The L.A. investment firm said that the committee should be “free of any influence or affiliation” with Tribune Chairman Michael Ferro or Vice Chairman Patrick Soon-Shiong, who last month bought a 12.92% stake in the company that made him Tribune’s second-largest shareholder, edging out Oaktree, which owns a 12.91% stake.
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Ferro remains Tribune’s largest shareholder, controlling 14.4% of shares.
Oaktree’s letter comes a day after Tribune’s slate of board nominees was elected with the support of a majority of shareholders, though a large contingent of investors withheld their votes in a show of support for a sale to USA Today publisher Gannett.
Tribune spokeswoman Dana Meyer said Friday that the board previously reviewed Oaktree’s request and “determined that no such committee is appropriate or necessary.”
The company has previously said it has a tech-heavy plan to boost shareholder value and that Gannett’s offer was too low. After Thursday’s board meeting, Tribune Publishing announced it will change its name to Tronc Inc. and trade on Nasdaq as of June 20 to reflect that strategy.
Oaktree has been locked in a war of words with Tribune in recent weeks, with Tribune contending Oaktree has implicitly agreed with its decision to reject Gannett’s bid -- and Oaktree arguing that’s not the case.
We would sell our shares at $15 per share … if the only alternative is to rely on your continued leadership of the company.
— Oaktree Capital Management
Before selling millions of newly issued shares to Soon-Shiong, a surgeon and biotech billionaire, Ferro offered to have an unnamed investor -- later confirmed to be Soon-Shiong -- buy out Oaktree’s position’s for $15 a share, the same price offered by Gannett.
Oaktree in an earlier letter said it refused to consider that offer and that it believed it could get a higher price if Tribune were willing to negotiate with Gannett.
In its letter Friday, though, it said it would now prefer to sell for $15 a share rather than stay invested in a company led by Ferro and the current board.
“Lest there be any doubt, however, we would sell our shares at $15 per share … if the only alternative is to rely on your continued leadership of the company,” Oaktree said in the letter.
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