Gannett Announces Early Termination of External Management Agreement
December 22 2020 - 6:45AM
Business Wire
Gannett Co., Inc. (“Gannett”, “we”, “us”, “our”, or the
“Company”) (NYSE: GCI) today announced that its external management
agreement (the “Management Agreement”) with FIG LLC, an affiliate
of Fortress Investment Group LLC (the “Manager”), will terminate as
of 11:59 p.m., Eastern Time, on December 31, 2020 – one year prior
to the scheduled termination date. Michael E. Reed, an employee of
the Manager who serves as the Company’s Chairman and Chief
Executive Officer, has accepted an offer of employment from the
Company, effective January 1, 2021, and will continue as Chairman
and Chief Executive Officer.
“The Board thanks Fortress for the support and guidance it has
provided to the Company,” said Mr. Reed. “When New Media acquired
Gannett in November 2019, we amended the external management
agreement to establish a termination date of December 31, 2021.
Since the closing of the acquisition, we have made significant
progress integrating the legacy companies and are ready now to move
forward independently. We believe the termination of the management
agreement will enable the Company to realize meaningful savings in
2021 and beyond.”
“During 2020, we have made great strides in several areas,
despite the challenges posed by the pandemic. We have significantly
reduced the balance of our term loan and are on track to repay
approximately $100 million more by early 2021. We have seen
continued improvement in our revenue trends throughout the fourth
quarter, and our integration work has facilitated the early
termination of the external management agreement. We believe the
early termination will accelerate not only the realization of
savings but also the achievement of certain corporate governance
goals, such as increasing the transparency of our executive
compensation disclosures. We look forward to building on this
momentum in 2021 as we continue to seek to increase shareholder
value.”
In lieu of the amounts that would otherwise have been payable to
the Manager in 2021, and as consideration for terminating the
Management Agreement one year early, the Company will make a
one-time cash payment to the Manager of $30.375 million. Given the
Company’s strong liquidity position, management believes that this
payment will not impact the Company’s debt repayment plans. The
termination of the Management Agreement was unanimously approved by
a committee of the Board composed entirely of independent and
disinterested directors. The committee was advised by Greenhill
& Co., LLC and Cravath, Swaine & Moore LLP.
As a material inducement for Mr. Reed accepting the Company’s
offer of employment, the Company expects to make a grant of
restricted stock units to Mr. Reed that will enable him to earn up
to 2,000,000 shares of the Company’s common stock generally subject
to the Company’s achievement of specified stock price goals over a
three-year performance period running from January 1, 2021 through
December 31, 2023. The Company expects to rely on the “employment
inducement award” exception to Section 303A.08 of the New York
Stock Exchange Listed Company Manual in making this grant of
restricted stock units to Mr. Reed.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally
focused media and marketing solutions company committed to the
communities in our network and helping them build relationships
with their local businesses. With an unmatched reach at the
national and local level, Gannett touches the lives of millions
with our Pulitzer-Prize winning content, consumer experiences and
benefits, and advertiser products and services. Its portfolio
includes the USA TODAY, local media organizations in 46 states in
the U.S. and Guam, and Newsquest, a wholly owned subsidiary with
over 140 local media brands operating in the United Kingdom.
Gannett also owns the digital marketing services companies
ReachLocal, Inc., UpCurve, Inc., and WordStream, Inc. and runs the
largest media-owned events business in the U.S., USA TODAY NETWORK
Ventures, formerly GateHouse Live. To connect with us, visit
www.gannett.com.
Cautionary Statement Regarding
Forward-Looking Statements
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding our expectations with respect to
savings from the termination of the Management Agreement, debt
repayment, fourth quarter operating results and the ability to
increase shareholder value. These statements are based on
management’s current expectations and beliefs and are subject to a
number of risks and uncertainties. These and other risks and
uncertainties could cause actual results to differ materially from
those described in the forward-looking statements, many of which
are beyond our control. The Company can give no assurance its
expectations will be attained. Accordingly, you should not place
undue reliance on any forward-looking statements contained in this
press release. For a discussion of some of the risks and important
factors that could cause actual results to differ from such
forward-looking statements, see the risks and other factors
detailed from time to time in the Company’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and other filings with the
Securities and Exchange Commission. Furthermore, new risks and
uncertainties emerge from time to time, and it is not possible for
the Company to predict or assess the impact of every factor that
may cause its actual results to differ from those contained in any
forward-looking statements. Such forward-looking statements speak
only as of the date of this press release. The Company expressly
disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Company’s expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based.
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version on businesswire.com: https://www.businesswire.com/news/home/20201222005092/en/
For investor inquiries, contact: Ashley Higgins Investor
Relations 212-479-3160 investors@gannett.com
For media inquiries, contact: Stephanie Tackach Director,
Public Relations 212-715-5490 stackach@gannett.com
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