The owner of the Los Angeles Times has a new name and a newly elected board, but it’s still dealing with some old business: A shareholder has sued the company, while spurned suitor Gannett Co. said it might continue its push for a buyout.
Tribune Publishing, the Chicago company that owns the Times, the Chicago Tribune and other daily newspapers, said Thursday that it would change its name to Tronc Inc., taking the name from technology that executives have said will be crucial to the company’s turnaround strategy.
The name change, an acronym for Tribune online content, will take effect June 20, the same day that Tribune Publishing stock will transfer from the New York Stock Exchange to the Nasdaq and start trading under the ticker symbol TRNC.
That announcement came hours after Tribune’s annual meeting, during which a Gannett executive made an in-person appeal for the company to reconsider its takeover offer.
Michael Dickerson, a Gannett vice president, encouraged the handful of shareholders at Thursday morning’s meeting in downtown Los Angeles to withhold votes for Tribune’s slate of board nominees, a symbolic move aimed at showing shareholder disapproval of the board’s decision to reject buyout offers from Gannett.
Tribune announced after the meeting that all nominees were elected — a foregone conclusion because there were no other candidates to vote for. The company later blasted Gannett’s “symbolic” and “feeble” campaign and said more than half of shareholder votes supported the company’s nominees.
Gannett, in its own statement, said more than half of shareholders — not including top shareholder and Tribune Chairman Michael Ferro and other company insiders — withheld their votes.
Lloyd Greif, chief executive of downtown LA investment bank Greif & Co., said Gannett’s campaign appears to have fallen short, probably spelling the end of the company’s fight to buy Tribune.
“If it had been more than half of all shareholders, it would have been a much more compelling statement,” he said. “They’re scrambling to put a good face on it.”
Gannett said last week that it would wait for the results of the vote before deciding whether to continue with its takeover bid. In a statement Thursday afternoon, the company said it is still reviewing whether to proceed.
Meanwhile, a small Tribune shareholder in San Diego has sued Tribune’s board, saying it failed to act in shareholders’ interests when it rejected two offers from Gannett. Those offers, of $12.25 and $15 per share, represented a huge premium over the company’s stock price, which had been trading near $7.50 before the bid.
The lawsuit had also been widely expected after two large shareholders publicly criticized Tribune’s decision to reject those offers.
The suit, filed Wednesday by San Diego real estate firm Capital Structures Realty Advisors, also targets LA biotech billionaire Patrick Soon-Shiong for “aiding and abetting” the board’s conduct.
Last month, Soon-Shiong’s firm Nant Capital invested $70.5 million for a 12.92 percent stake in Tribune in a move that appeared to be aimed at diminishing the influence of Oaktree Capital Management, a major Tribune shareholder that had publicly pushed Tribune to sell to Gannett.
Tribune Publishing spokeswoman Dana Meyer said the company is reviewing the complaint.
“The stock sales to Merrick Media and Nant Capital were approved by the Board of Directors and will provide valuable growth capital to allow the company to execute on its new value-creating business plan,” she said in a statement.
Three firms that advise public company shareholders have issued reports saying it appeared that Tribune’s board gave Gannett’s offers a serious look before turning them down.
Greif said those reports, and the results of Thursday’s shareholder vote, mean the suit has little chance of moving forward, though the plaintiff may be able to squeeze a settlement out of Tribune.
“This kind of litigation can be costly and distracting,” he said. “At some point, it gets less expensive to write a check to the plaintiff than to litigate.”
Capital Structures is not listed among Tribune’s major shareholders and has made no public filings indicating an ownership stake in the newspaper company. In its legal filing, the company said it has been a Tribune shareholder since before Gannett first offered to buy Tribune in April.
Capital Structures alleges that Tribune’s board, at Chairman Michael Ferro’s behest, did not make a real effort to negotiate with Gannett and approved a stock sale to Soon-Shiong that devalued shareholders’ stakes in the company while not serving any obvious purpose beyond diminishing Oaktree’s influence.
The case seeks to undo the stock sale to Soon-Shiong and unspecified damages from Tribune’s board of directors.
Representatives for Soon-Shiong did not immediately respond to requests for comment.
Tribune Publishing stock closed Thursday at $11.38, down about 2 percent for the day.