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 Tribune shares fell by more than 4 percent after closing at $11.02
and Gannett's stock dropped about 13 percent after closing at
$16.27, in after-market trading.
Last month, Gannett, the owner of USA Today, made a takeover bid for
Tribune at $12.25 per share in cash, in a deal worth roughly $815
million.. Tribune owns the Los Angeles Times and Chicago Tribune
newspapers, as well as metro dailies like the Orlando Sentinel.
In a letter on Wednesday, Tribune told Gannett's management that its
board had reviewed the bid and decided that "the price reflected in
the proposal understates the company's true value and is not in the
best interests of our shareholders." It does not warrant "further
discussion," the company said in a statement.
 Tribune's rejection of Gannett's proposal, comes as the newspaper
industry tackles declining circulation, high costs, shrinking
advertising dollars and a broad shift toward digital content,
leaving publishers rushing to consolidate or find new avenues of
growth.
Gannett, in response, said in a statement on Wednesday it was
committed to pursuing a deal and "intends to solicit withhold votes
in order to advance shareholders."
In a statement on Monday, Gannett Chief Executive Robert Dickey
urged Tribune shareholders to withhold their votes for board
nominees during Tribune's June 2 annual meeting and send a "clear
message" to Tribune's board to engage seriously.
Gannett has been on a mission to buy rivals to create a more
efficient company by expanding its footprint into more cities.
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"Gannett is best positioned to advance Tribune's publications and
journalism as Gannett's strategy to grow the USA TODAY NETWORK would
seamlessly extend to Tribune," Dickey said in Gannett's statement.
Tribune Publishing said its board believes that its new plan, which
includes driving revenue from content brands, growing the Los
Angeles Times as a global brand and embracing a digital strategy
will "generate shareholder value in excess of Gannett's
opportunistic proposal."
Gannett's claims that its offer was not taken seriously by Tribune
are "misleading," Tribune Chief Executive Justin Dearborn said on an
earnings call with analysts on Wednesday.
Gannett said in its statement that Tribune's board continues to deny
it access to due diligence that could help to improve its offer.
(Reporting by Malathi Nayak; Editing by Leslie Adler and Sandra
Maler)
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