MNG Enterprises, a hedge fund-backed owner of US newspapers known for hollowing out newsrooms across America, has made a proposal to buy the proprietor of USA Today for $1.4bn.
Under the terms made public on Monday, Gannett shareholders would receive $12 per share, which represents a 23 per cent premium over Friday’s closing price of $9.75.
Alden Global Capital, a New York investment fund that controls MNG, has been extremely profitable at consolidating the newspaper industry by buying ailing titles and aggressively slashing costs and firing journalists.
Alden owns more than 200 newspapers through its Digital Media First unit. Among the titles it includes are the Denver Post and Orange County Register.
Monday’s offer for Gannett, which owns several regional titles as well as USA Today, one of America’s most recognisable media brands, would represent Alden’s boldest acquisition to date.
MNG Enterprises said that it had built a 7.5 per cent stake in Gannett, making it the largest “active” investor in the newspaper group.
In a letter to Gannett’s management, MNG made a series of requests in addition to considering a sale, which include ending any attempts to buy more digital assets.
In the letter to Gannett, which is looking for a new chief executive, MNG said that “the team leading Gannett has not demonstrated that it is capable of effectively running it as a public company”.