A media company led by a hedge fund is making a bid to take over USA Today parent Gannett that is one of the largest newspaper companies in the U.S. MNG Enterprises also known as Digital First Media announced on Monday that it has proposed to purchase Gannett for $12 a share in cash, which would be a 23% premium above Friday’s closing price of $9.75 a share. Hedge fund Alden Global Capital owns digital First Media.
Gannett Co. owns USA Today and 109 other local media properties like the Arizona Republic and the Detroit Free Press. While on the other hand, Digital First operates daily and weekly publications that include the Denver Post, the Los Angeles Daily News, and the Boston Herald. Gannett has lost more than 40 percent of its value over the last two years, so this drop makes MNG acquire it, said MNG. However, shares rose 14 percent in early trading Monday to $11. According to the WSJ’s sources, MNG has built a 7.5% position in Gannett’s stock and plans to urge the McLean to put itself up for sale publicly. Well, if this happens then, the history suggests that it would be dire news for the industry in general. Digital First Media already owns 56 newspapers.
Digital First doesn’t have a good reputation among journalists. Wall Street Journal media and tech writer Keach Hagey reacted on this news through twitter saying after watching what Gannett has done to her hometown paper – cutting most of the staff, outsourcing printing so far away local sports scores can’t appear the next day, she is fascinated to know what fat Digital First think is left. One editorial went as far as to call MNG vulture capitalists.
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Alex previously worked in a marketing company. But after revealing his interest in journalism and reporting He decided to become a contributor. Thus, writing business-related news is Alex’s cup of tea. Additionally, He has an in-depth knowledge of the sector. He primarily focus on energy, finance, the world economy.