The Justice Department is poised to approve Charter Communications Inc’s proposed purchase of Time Warner Cable Inc and Bright House networks, sources said on Monday.
A Time Warner Cable service technician works on cable service from a van parked on the Upper West side of the Manhattan borough of New York City, May 26, 2015. REUTERS/Mike Segar
Federal Communications Commission Chairman Tom Wheeler is expected to circulate an order seeking approval of the deal from the five-member commission with conditions later on Monday, one of the sources said.
The Growth of ‘One World Media’
Earlier today, Gannett Co Inc, publisher of USA Today, said it offered to buy Tribune Publishing Co in a deal valued at about $815 million, including debt, but the owner of the Los Angeles Times and Chicago Tribune refused to begin “constructive” talks.
“We therefore are prepared to consider all alternatives to complete this transaction,” Gannett Chief Executive Robert Dickey said in a letter to Tribune Publishing’s board on Monday.
Tribune Publishing, however, said in a statement that it had told Gannett it would engage financial and legal advisers to review the proposal and its “numerous contingencies.”
Chicago-based Tribune Publishing has been shaking up its top management, replacing its chief executive in February and said a month later that it would replace its chief financial officer.
The company also dismissed auditor PricewaterhouseCoopers LLP in March after identifying material weaknesses in internal controls over its financial reporting.
“Tribune in some degree has been in disarray with the recent management changes and the company has been slow to implement its digital strategy,” said Michael Kupinski, an analyst at Noble Financial Capital Markets.
“Gannett seems to be taking this as an opportunity to strike quickly,” he said, adding that TribunePublishing would be a compelling acquisition at Gannett’s offer of $12.25 per share.
Peter Lewis of Towle & Co, the seventh-largest shareholder in Tribune, said however that the offer price was well below the investment firm’s sell target, which was in the “high teens”.
The offer represents a premium of about 63 percent to Tribune Publishing’s Friday closing price $7.52. Tribune‘s Publishing’s shares closed at $6.86 on April 11.
Tribune Publishing’s shares, which have lost half of their value in the last nine months, were up 57 percent at $11.78 in early trading on Monday. Gannett’s shares, which have gained 16 percent over the same period, were up 0.4 percent at $15.84.
Gannett’s proposal, made on April 12, includes the assumption of $390 million of debt as well as other liabilities.
The offer also comes at a time when the print industry is grappling with falling sales and circulation as more people get their news from digital media.
“Continuing to refuse to engage in a dialogue with us will only serve to delay the ability of your stockholders to receive the value represented by our all-cash offer,” Dickey said.
Tribune Publishing reported a loss of $2.8 million in 2015 as revenue slipped 2.1 percent to $1.67 billion. Gannett posted a profit of $146.1 million, while revenue fell 9 percent to $2.89 billion.
Tribune Co spun off its publishing assets into Tribune Publishing in 2014, and renamed the parent company, which houses its broadcasting and digital assets, Tribune Media Co.
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