The proposed deal for newspaper giant Gannett to acquire Baltimore Sun parent company tronc, Inc., is no more.
For months, the two media firms had been arranging for Gannett, the largest publisher of newspapers in the states, to acquire the strangely named tronc, which prints the Baltimore Sun, the Chicago Tribune and the Los Angeles Times, among others. In late August, it seemed like the acquisition was a hair’s length from happening. One source even described the deal as being in “not if but when” status.
But it never came to fruition. Last week, outlets reported that financing was suddenly looking iffy for the deal. (Amid those reports, unionized Sun staffers launched a public awareness campaign about their efforts to get a seldom-seen raise.) As it turns out, Gannett experienced an “unexpected delay” in obtaining financing. Banks that would have supplied the hundreds of millions of dollars for the deal backed out.
“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 in a statement on its website today. “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.”
In the fallout, tronc’s shares had fallen nearly 17 percent by just after 11 a.m. on the Nasdaq exchange. Gannett, meanwhile, gained slightly in share value by not making the move.
The broken deal is the latest bump in a roller coaster year for the company once known as Tribune Publishing. Investor Michael Ferro bought a majority stake in the company in February and became its executive chairman, according to The New York Times. He then rebranded it four months later as tronc, inc. – not a newspaper publisher, but a “content curation and monetization company focused on creating and distributing premium, verified content across all channels.” What an odd way to describe writing the news…
It will be interesting to see how this affects affairs over at Baltimore’s hometown paper. The company obviously hasn’t said anything about staff cuts or other major changes yet. Instead, tronc said wordily in its statement that it “continues to make progress in implementing the company’s strategic plan to leverage technology and effectively monetize its world class content.”