Gannett drops bid for LA Times owner Tronc

USA Today publisher Gannett announced Tuesday it was ending its bid for Los Angeles Times owner Tronc, a deal which would have created a powerhouse in the newspaper sector.

Months after its offer for the newspaper rival was announced in April, Gannett said in a brief statement it "has determined not to pursue an acquisition of Tronc," without elaborating.

Tronc said in a separate statement that the two firms had agreed on a purchase price but that the deal collapsed when Gannett's financing fell through.

"It is unfortunate that Gannett's lenders made their decision to terminate their role in the transaction without the benefit of Tronc's third-quarter financials or any future projections," Tronc said.

"Tronc remained a constructive partner to Gannett as it sought to complete its financing for the agreed-upon purchase price, however, Gannett was unable to do so and terminated discussions."

Gannett had initially offered $815 million for the group formerly known as Tribune Publishing, which also publishes the Chicago Tribune, Baltimore Sun and other dailies.

It later boosted the offer to $864 million and some reports said the two companies were close to a deal for about $1 billion.

Gannett is already the largest US newspaper group with more than 100 dailies, and some analysts said the deal could provide additional scale to help it better adapt to the digital age.

Tronc executives had on several occasions rejected the Gannett offer, saying the company would pursue its own digital transformation, although some shareholders had reportedly been pressuring the group to accept a deal.

With the collapse of the Gannett deal, Tronc said it remains "committed to taking the necessary steps to transform its business in response to the massive changes that have overtaken the publishing industry, supporting the company's outstanding journalists and, above all, delivering value to shareholders."

Tribune Publishing, rebranded as Tronc this year, was spun off the larger Tribune Co. in 2014, and has been examining options such as the sale of the coveted Los Angeles daily.

Tronc separately reported a net loss of $10 million for the third quarter, dragged down by tax-related charged. Revenues were down 6.8 percent to $378 million led by a 10.9 percent drop in advertising receipts, which the company said was "in line with industry trends."