Reiterates that ALL of MNG’s Nominees Have
Irreconcilable Conflicts of Interests and the Election of Even One
of MNG’s Nominees Would Reduce the Quality of the Gannett Board
Underscores that MNG’s Unsolicited Proposal
Undervalues Gannett and Is Not Credible or Actionable
Urges Shareholders to Vote “FOR ALL” of
Gannett’s Eight Highly Experienced, Independent Director Nominees
on the WHITE Proxy Card TODAY
Gannett Co., Inc. (NYSE: GCI) (“Gannett” or “company”) today
issued a statement in response to a report issued by Institutional
Shareholder Services (“ISS”) in connection with the company’s 2019
Annual Meeting of Shareholders to be held on May 16, 2019.
In its May 2, 2019 report, ISS acknowledges1:
- “There are significant concerns
relating to financing…the dissident has not secured committed
financing. This speaks for itself, and its significance is enhanced
by the public record confirming that an NDA is not necessarily
required for committed financing in hostile situations. There are
also significant concerns relating to antitrust and pension
issues.”
- “According to GCI, a DOJ review could
result in a DOJ-led sale to address concerns relating to
anticompetitive behavior. In a DOJ-led sale, the parties would not
have control over the timeline or the economic terms. It is unclear
what impact these factors would have on the apportionment of risk
and the offer price – neither of these concerns appear to be
thoroughly addressed by the dissident in its public disclosure.
These considerations are particularly important, as the Detroit
assets appear to be among GCI's most significant (in the most
recent 10-K, the Detroit publication is listed as having the second
largest daily and Sunday circulations among GCI's publications,
second only to USA TODAY).”
Commenting on the report, the company issued the following
statement:
We are pleased that ISS has recommended that
Gannett shareholders withhold votes for two of MNG’s nominees,
Heath Freeman and Dana Goldsmith Needleman, and recognizes the
significant concerns Gannett has raised regarding financing,
antitrust and pension issues as it relates to MNG’s unsolicited
proposal.
However, we firmly believe that ISS has
reached the wrong conclusion in failing to recommend that Gannett
shareholders vote “FOR ALL” of Gannett’s eight highly experienced
and fully independent director nominees – John Jeffry Louis, John
E. Cody, Stephen W. Coll, Donald Felsinger, Lila Ibrahim, Lawrence
S. Kramer, Debra Sandler and Chloe R. Sladden – on the WHITE proxy
card.
As we have stated before, Steven Rossi has NO
public board experience outside of his brief tenure on the board of
Fred’s, Inc., a regional pharmacy chain, where he was appointed not
due to his qualifications, but instead due to his relationship with
Mr. Freeman and Alden Global Capital, the controlling shareholder
of both MNG and Fred’s. Indeed, Mr. Rossi was appointed to the
Fred’s board along with Mr. Freeman pursuant to a Cooperation
Agreement between Fred’s and Alden. During his tenure on the Fred’s
board, Mr. Rossi has overseen significant value destruction, with
the stock declining 92% since Alden invested in December 2016,
despite Fred’s operating in a steadily growing market.2
Furthermore and even more troubling, we
believe Mr. Rossi’s very close ties to MNG and Alden would prevent
him from being able to meaningfully fulfill his duties as a Gannett
director. Mr. Rossi served as CEO of MNG (a direct competitor of
Gannett) until his retirement in November 2017 and, as noted,
currently serves as a director on the Fred’s board, after being
hand-picked for the board by Alden.
Because of the clear and concerning conflicts
of interest resulting from Mr. Rossi’s affiliations with a direct
competitor and the controlling owner of a direct competitor, Mr.
Rossi may face significant restrictions on the company information
to which he could have access, meaning he could not benefit from
the same information available to Gannett’s independent director
nominees and would not be able to participate fully in decisions
critical to creating value for our shareholders.
Placing an inadequately qualified and
significantly conflicted nominee such as Mr. Rossi on the board
would do nothing to further the interests of all Gannett
shareholders.
In contrast, each of Gannett’s nominees is
extremely qualified, fully independent and brings to the table
unique visions and strategic perspectives. Together, they have been
actively engaged in overseeing our multi-year digital
transformation designed to position the company to thrive in a
digital world and ensuring the company’s strategies provide the
best opportunities for tangible value creation amid a changing
media environment. While we acknowledge that transformation is
hard, the board is confident that Gannett is on the right path.
Still, the Gannett board has repeatedly stated that Gannett would
engage with any party that makes a bona fide, credible proposal
that appropriately values the company and is capable of being
closed. MNG’s proposal fails that test.
Replacing any of Gannett’s directors with Mr.
Rossi – or any of MNG’s nominees – would deprive the board of
critical experience and expertise that are central to Gannett’s
operations, digital transformation and value proposition and would
jeopardize the value of shareholders’ investment.
Every shareholder vote is extremely important
– vote “FOR ALL” of Gannett’s eight highly experienced and
independent director nominees on your WHITE proxy card today.
Shareholders are urged to protect the value of their
investment by voting “FOR ALL” of Gannett’s independent director
nominees on the WHITE proxy card today: John Jeffry Louis, John
E. Cody, Stephen W. Coll, Donald Felsinger, Lila Ibrahim, Lawrence
S. Kramer, Debra Sandler and Chloe R. Sladden.
If you have any questions, or need assistance
in votingyour shares, please call the firm assisting usin the
solicitation of proxies:
INNISFREE M&A
INCORPORATEDTOLL-FREE at 1-877-456-3507
Remember: Please simply discard any Blue proxy
card you may receive from MNG. Any vote on MNG’s Blue proxy card
(even a vote in protest on their nominees) will revoke any earlier
proxy card that you have submitted to Gannett.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally
focused media and marketing solutions company committed to
strengthening communities across our network. With an unmatched
local-to-national reach, Gannett touches the lives of more than 125
million people monthly with our Pulitzer-Prize winning content,
consumer experiences and benefits, and advertiser products and
services. Gannett brands include USA TODAY NETWORK with the iconic
USA TODAY and more than 100 local media brands, digital marketing
services companies ReachLocal, WordStream and SweetIQ, and U.K.
media company Newsquest. To connect with us, visit www.gannett.com.
Forward-Looking Statements
This communication contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include all statements that are
not historical facts. The words “believe,” “expect,” “estimate,”
“could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,”
“project” and similar expressions, among others, generally identify
forward-looking statements, which speak only as of the date the
statements were made and are not guarantees of future performance.
Where, in any forward-looking statement, an expectation or belief
as to future results or events is expressed, such expectation or
belief is based on the current plans and expectations of our
management and expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
Whether or not any such forward-looking statements are in fact
achieved will depend on future events, some of which are beyond our
control. The matters discussed in these forward-looking statements
are subject to a number of risks, trends, uncertainties and other
factors that could cause actual results or events to differ
materially from those projected, anticipated or implied in the
forward-looking statements, including the matters described under
the heading “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the
company’s annual report on Form 10-K for fiscal year 2018 and in
the company’s other SEC filings.
1 Permission to use quotations neither sought nor obtained.
2 Based on Fred’s closing stock prices on April 18, 2019, and
December 21, 2016 (the day prior to the filing of Alden’s initial
13D). Market growth source: Euromonitor. Statement based on
2013-2018 CAGR of 3% for drugstores/parapharmacies in the U.S.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190502005513/en/
For investor inquiries:Stacy CunninghamVice President,
Financial Planning & Investor Relations703-854-3168investors@gannett.comArthur Crozier / Jennifer
Shotwell / Larry MillerInnisfree M&A Incorporated(212)
750-5833For media inquiries:Amber AllmanVice President,
Corporate Events & Communications703-854-5358aallman@gannett.comEd Trissel / Nick Lamplough /
Tim RagonesJoele Frank, Wilkinson Brimmer Katcher(212) 355-4449
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