In January, Digital First Media, known formally as MNG Enterprises and a division of New York hedge fund Alden Global Capital, made a play for Gannett’s stable of publications. Offering $12 a share, Digital First’s offer marked a 23% premium over the publisher’s market closing price at the time.
Soon after, Gannett struck down the bid as “not credible,” and stated that it did not believe Digital First could obtain the funds needed to buy out the publisher.
This week, in another push forward, Digital First Media announced it had received a letter from Oaktree Capital Management, a subsidiary of Oaktree Capital Group, stating that Oaktree is “highly confident” that Digital First could obtain the $1.725 billion, if not more, to take over Gannett.
The amount stated would allow Digital First to buy out Gannett at $12 per share and pay all related fees, costs and expenses related to the transaction.
R. Joseph Fuchs, Chairman of the Board of MNG Enterprises, Inc., stated: “It’s time for Gannett’s Board of Directors to stop blocking value creation opportunities for its shareholders and engage with MNG… We are prepared to move quickly and believe if granted the ability to conduct confirmatory due diligence, we can complete our work and finalize a financing package within weeks.”
More information about the deal and Digital First’s attempts to unseat members of Gannett’s board with its own nominees can be found at the MNG-run site called “savegannett.com.”
Following Digital First’s announcement, Gannett issued a statement, reading in part: “The letter that MNG has procured from Oaktree’s distressed debt fund, Oaktree Strategic Credit, more than two months after MNG launched its unsolicited proposal, does not represent a contractual commitment or a legal obligation, and is highly conditional.
"Furthermore, Oaktree Strategic Credit did not indicate that it was confident in its own ability to arrange committed financing or otherwise suggest it would even play a role in the financing, as would be customary in a letter of this kind.”Digital First Media is known for buying up local papers across the U.S., then stripping them of resources and staff, frequently consolidating services far from a publication’s home office.
Currently, the company owns around 200 newspapers and other publications, including the Boston Herald, which it won in a bankruptcy bidding war last year.