• by Erik Sass , Staff Writer @eriksass1, May 20, 2016

Faced with an unexpected buyout offer from Gannett, Tribune Publishing chairman Michael Ferro is embracing his inner Moe Green, the casino impresario from “The Godfather” (based loosely on Las Vegas founder Bugsy Siegel) who angrily tells Michael Corleone: “The Corleone Family wants to buy me out? No, I buy you out, you don't buy me out.”

Ferro is apparently determined to turn the tables in fairly dramatic fashion, according to newspaper guru Ken Doctor. He writes in Politicothat Tribune’s new chairman is working on a counterbid for Gannett, just weeks after receiving Gannett’s bid for Tribune — and a few days after receiving another, higher bid when the first was rejected.

Doctor reports that Ferro told Los Angeles Times employees on Tuesday that his lawyers are working on a plan for Tribune to acquire Gannett, which is currently valued at almost $1.9 billion in market capitalization.

Doctor further notes that the idea is rather a long shot, even for an accomplished wheeler dealer like Ferro. He may find it rather difficult to pull together financing on the scale, especially in light of the substantial premium Tribune will have to pay over and above the current stock price.

The bizarre turn of events comes as Ferro finds himself under growing pressure from Tribune shareholders to seriously consider the Gannett buyout offer, which now stands at $15 per share, up from the original bid of $12.25 per share, for a total of $864 million (including assuming debts of $390 million).

The latest bid represents a 7.4% premium over Tribune’s current share price of $13.96, and more than double its share price of $7.33 before the first Gannett bid became public. This week, Tribune shareholder Oaktree Capital, which holds a 14.8% stake in the company, publicly urged Ferro and Tribune’s board to accept the offer. 

It warned that “through pursuing an independent course, Tribune will destroy enormous shareholder value.”

The Tribune board has already warned that it will implement a “poison pill” defense to fend off the Gannett bid, supposedly in protection of shareholder rights. In this scenario, Tribune would offer additional preferred shares to existing shareholders at a discount if any entity tried to acquire more than 20% of the company.

Ferro’s reluctance to part with Tribune is understandable, considering that he just got there.

Previously, the majority owner of Chicago Sun Times publisher Wrapports, which he acquired in 2011, Ferro bought a 16.6% stake in Tribune Publishing for $44.4 million in February, making him the largest individual shareholder in the company. He soon exercised his power as non-executive chairman to push out former CEO Jack Griffin, who was replaced by Justin Dearborn.