USA Today publisher Gannett dropped its bid to buy rival publisher Tronc on Tuesday sending the latter’s share price into a tailspin and ending a months-long pursuit.
With a one-sentence statement, Gannett ended its hotly contested bid to buy Tronc, the recently rebranded owner of 11 newspapers including the Chicago Tribune and the LA Times.
“Gannett Co Inc today confirmed that the Company has been engaged in discussions with Tronc Inc regarding a potential transaction and has determined not to pursue an acquisition of Tronc,” read the company’s unattributed statement to investors.
Trading in shares of Tronc, formerly Tribune, was briefly suspended last week after a report from Bloomberg that bankers backing the deal had decided both companies were overvalued.
The deal had been in the works since April. Gannett’s initial offer valued Tronc at $12.25 a share, it was later raised to $15. By mid-morning on Tuesday Tronc’s shares had fallen 20% to $9.59.
In a statement to the Chicago Tribune, Gannett said that the terms of the deal were not acceptable. “As we have said before, Gannett will not make acquisitions unless they are accretive to shareholders and the terms make sense for the company,” Gannett told the paper.
Shares of Gannett jumped 7% on the news before readjusting, while shares of Tronc plummeted 19% in pre-market trading. Gannett reports its quarterly results after the markets close on Tuesday.
Tribune’s rebranding as Tronc was meant to signal a new digital future for the company but instead made the company a figure of ridicule among reporters. The company’s insistence on a lowercase “t” and its management-speak-filled press release led to much mockery.
One way the company will succeed, said Tronc’s chief digital officer, Anne Vasquez, in a much-mocked video, is to “harness the power of our local journalism, feed it into a funnel, and then optimize it so that we reach the biggest global audience possible”.
The transaction would have been only the latest in a series of high-profile media consolidation deals: AT&T has signed on to purchase Time Warner entertainment, Charter Communications will buy Time Warner Cable, and rumors continue to fly around possible acquisitions for microblogging service Twitter and high-profile media company Vice.