Tribune Publishing chairman Michael Ferro scored an apparent victory Thursday.
Shareholders voted for all of management's proposed members of the board of directors, a decision which Tribune’s management and media watchers alike portray as a vote of confidence in their plans for the company — and a rejection of Gannett’s $864 million takeover bid.
Tribune then celebrated by changing its name to one of the worst corporate monikers in history: “Tronc.” (That's short for Tribune online content.)
Frustrated by Tribune’s repeated rejection of its acquisition offers, Gannett had taken its case directly to Tribune’s shareholders, urging them to withhold their votes for the board of directors to show their support for the deal.
While a defeat here wouldn’t have immediately forced a sale, it would set the stage for the election of a new board more sympathetic to Gannett’s offer.
While the vote for management's slate of board members is a clear setback for Gannett, the latter is trying to spin it as a non-rejection of the deal, though obviously short of an endorsement.
Gannett noticed that among shareholders not directly associated with Tribune’s management and its allies, nearly half (49%) withheld their votes from all eight board nominees, indicating a substantial cohort of shareholders who disagree with management’s current course.
Further, four major institution shareholders also withheld their votes.
However, the fact remains that more than half of Tribune’s shareholders voted in favor of the board, which in a corporate democracy means Gannett can “go fish.” On that note, the publisher also said it is “reviewing” its offer for Tribune, possibly signaling a retreat or alternatively a higher offer.
Adding yet another wrinkle, one of Tribune’s shareholders, Capital Structures Realty Advisors, is suing Tribune’s management for breach of fiduciary duty in rejecting the $15-per-share offer from Gannett, then turning around and selling 4.7 million shares to Nant Capital, an investment vehicle owned by tech billionaire Patrick Soon-Shiong, for the exact same price.
Whatever happens next in this clash of the declining traditional media titans, one thing is clear: Tribune’s new name -- Tronc -- reflecting its digital future under Ferro – has got to be one of the worst-sounding corporate rebranding efforts ever.
Between its association with the outdated digital vision of the movie “Tron,” the unfortunate resonance with the word “truncate” (as in, “they truncated the stock value”), and its own sheer auditory ugliness, “Tronc” proves once again that being rich and powerful does not make you a branding expert.
Mr. Ferro, tear down this fail!