A New York hedge fund known for slashing newsroom staffs is backing a hostile takeover bid for Gannett, the publisher of USA Today and 100 other newspapers, including the Baxter Bulletin in Mountain Home. Gannett also owned the Arkansas Gazette until 1991, when it closed the 172-year-old newspaper and sold the assets and name to what is now Arkansas Democrat-Gazette, Inc.
The Arkansas Democrat Gazette reports the unsolicited offer, worth over $1.3 billion, would create the largest newspaper company in the United States.
In an open letter to the Gannett board, MNG Enterprises, which is owned by the hedge fund Alden Global Capital, offered on Monday to pay $12 cash per Gannett share, a 23 percent premium on the company’s closing price on Friday. Gannett shares closed 21 percent higher in New York.
MNG said in its letter Gannett had “suffered from a series of value-destroying decisions made by an unfocused leadership team.”
Operating under the name Digital First Media, MNG owns around 200 publications, including The Denver Post and The San Jose Mercury News in California. It said it was Gannett’s largest shareholder, with a 7.5 percent stake.
Gannett, which is based in McLean, Va., said in a statement its board would review the unsolicited proposal and that “no action needs to be taken” immediately.
Critics have described Alden as a “destroyer of newspapers” that is prone to “savage” layoffs, and as “one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.”
Alden’s bid comes amid a hollowing out of local newspapers across the country. Broader shifts in the media industry have devastated smaller publications over the past decade, with many closing and others reducing newsroom staffs and the number of times a week they are printed.
Gannett’s revenue has been relatively flat from 2014 to the end of 2017, but its profit has shrunk in that time to $97 million from over $280 million. The company has also cut its workforce sharply, including letting go many newsroom employees. A company overview from the end of 2015 recorded 19,600 employees. By the end of 2017, the figure was 15,300.
MNG did not outline how it planned to manage Gannett.
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