Gannett (GCI) said on Tuesday it decided against pursuing an acquisition of Tronc (TRNC), the owner of the Chicago Tribune and Los Angeles Times, after financing reportedly fell through.
“Gannett Co., Inc. today confirmed that the Company has been engaged in discussions with tronc, Inc. regarding a potential transaction and has determined not to pursue an acquisition of tronc,” Gannett said in a one-line statement on its website.
The USA Today publisher, which also owns The Arizona Republic, reportedly lost bank backing for the acquisition last month, according to Bloomberg News, which at the time cited unnamed sources. A Gannett spokesperson on Tuesday told The Wall Street Journal that while the company believed the transaction would provide an “attractive opportunity to expand the USA Today Network quickly, in the end the terms were not acceptable.”
Tronc said in a statement it was wary of Gannett’s ability to close the deal due to shaky financing.
“As noted previously, tronc had serious doubts about Gannett’s ability to finance a transaction that was in the best interest of tronc’s shareholders and other stakeholders,” Tronc said. “Nonetheless, over the past several months, the tronc board, management team and their advisors engaged in substantive discussions and due diligence with Gannett regarding a potential transaction, with an unwavering focus on creating value for tronc shareholders.”
The companies agreed to a purchase price in the middle of September, but Tronc said it was informed by Gannett that its financing had experienced an unexpected setback.
“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 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,” Tronc said.