Gannett, Tronc Deal Hits Wall

Sometimes things that seem imminent, like the collapse of Western civilization, turn out to be not so imminent after all, though they might still be imminent later.

On that note, if a considerably smaller scale, Gannett’s impending acquisition of Tronc, formerly Tribune Publishing, appears to be less impending than before. That’s according to newspaper guru Ken Doctor, who reports for Politico that the $1 billion deal — rumored to be imminent last week — has been delayed for reasons that aren’t clear.

Doctor notes that a scheduled meeting of the Tronc board of directors was canceled at the last minute on Wednesday afternoon. Although the planned agenda hasn’t been made public, it presumably had something to do with the proposed acquisition.

The unexpected cancellation suggests that some sort of unforeseen issue has risen.

Citing unnamed sources, Doctor speculates that the last-minute hiccup may concern provisions in the deal that are intended to secure the editorial independence of the Los Angeles Times, the largest newspaper and long-troubled crown jewel of the Tronc empire.

The same provisions would assuage the concerns of a major investor, Patrick Soon-Shiong. He was brought on board by Tronc CEO Michael Ferro back in May in an attempt to fend off a Gannett takeover, which Ferro has staunchly opposed.

Soon-Shiong’s interest in Tronc is focused almost exclusively on the LA Times, whose independence he has championed.

To keep Soon-Shiong onside for the sale to Gannett, the latter has promised to sell a minority stake in the company or the newspaper itself to him, continuing his involvement going forward. Even more unusual, Doctor reports Gannett may agree to the creation of an independent board to oversee the LAT’s editorial operations.

Again, it’s unclear what connection these unorthodox conditions have with the canceled board meeting and apparent confusion in the corporate dealings. But given the huge premium Gannett is willing to pay for Tronc — 140% over its pre-negotiation stock price — it behooves Tronc shareholders to ensure the deal is completed in some form or another.

With any luck it will be re-impending again soon.

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