The American owner of regional publishing giant Newsquest is facing a potential takeover bid after receiving what it called an “unsolicited” offer.
Digital First Media, also known as MNG, has built up a 7.5pc stake in Newsquest owner Gannett in what industry analysts are viewing as a precursor to a full buy-out.
The Wall Street Journal reported that Digital First plans to publicly urge Gannett, which owns more than 100 newspapers including US Today, to put itself up for sale.
Gannett bosses initially attempted to play down the reports, saying they had received no communication from the would-be bidder, but have since confirmed the bid.
It said in a statement: “Gannett today confirmed that it has received an unsolicited proposal from MNG Enterprises Inc. to acquire Gannett for $12 per share in cash. Gannett’s stock closed at $9.75 on Friday, January 11, 2019.
“Consistent with its fiduciary duties and in consultation with its financial and legal advisors, the Gannett board of directors will carefully review the proposal received to determine the course of action that it believes is in the best interest of the company and Gannett shareholders. No action needs to be taken by Gannett shareholders at this point.”
In an earlier email to staff, chief executive Bob Dickey had written: “You may have recently seen media stories regarding MNG Enterprises, or Digital First Media, and their plan to make a proposal to acquire our company.
“To date there has been no communication to Gannett regarding a proposal. The company and board are well advised, and if we have more information we will keep you informed. During this time, it’s business as usual for us and we need to stay focused.”
Digital First, which itself owns 56 newspapers, is controlled by Alden Global Capital, a US hedge fund.
The National Union of Journalists has voiced concern about the bid, describring the would-be buyers as “vulture capitalist corporate raiders.”
National coordinator Chris Morley said: “The proprietorship of Gannett over Newsquest as its UK operation has been a sorry tale of shameless cost-cutting that has threatened to bring low once mighty titles through the pursuit of unsustainable profits and starvation of investment.
“But the reports coming out of the US from those who should know, is that Gannett itself is being pursued by the most predatory of vulture capitalist corporate raiders who are far distant from the needs and responsibilities of a modern media company.
“In this time of great uncertainty, the NUJ will be vigilant in upholding and defending the interests of its members and the essential journalism they produce.”
Newsquest has declined to comment.