Gannett staves off takeover by hedge fund-backed Digital First

Gannett staves off takeover by hedge fund-backed Digital First
© Getty Images

Gannett prevailed in a proxy fight with hedge fund-backed Digital First Media, according to a preliminary vote count.

The election of Gannett's slate of eight nominees ensures the McLean, Va.-based publisher will retain control of its board of directors. 

ADVERTISEMENT

“Consistent with the interactions with our investors leading up to the meeting, this outcome demonstrates that Gannett shareholders recognize the continued progress we have made toward our ongoing digital transformation and agree that our strategic plan is the best path to deliver value for all Gannett shareholders,” Gannett said in a Thursday statement.

The vote comes four months after Digital First claimed Gannett had "not demonstrated that it's capable of effectively running this enterprise as a public company" and should consider a sale.

Digital First, which is officially known as MNG Enterprises Inc., characterized the results on Thursday as “a win for an entrenched Gannett board that has been unwilling to address the current realities of the newspaper business.”

"If Gannett’s Board does not shift course from overpaying for noncore, aspirational and dilutive digital deals, we believe the stock will drop further," the statement adds.

In addition to USA Today, Gannett owns and operates dozens of notable local newspapers, including The Record in New Jersey, the Arizona Republic and the Green Bay Press-Gazette in Wisconsin.

Digital First owns about 200 publications across the country, including the Denver Post, Detroit News and Boston Herald. All have experienced considerable layoffs since being purchased by Digital First in recent years.

The proposed purchase underscores the challenges newspapers are experiencing, largely due to drops in print advertising and an increasingly oversaturated market in the digital era.

More than half of the largest newspapers in the U.S. have laid off employees since January 2017, according to a 2018 Pew Research Center study.

Pew found that nine of the 16 newspapers with circulations of 250,000 or more, or 56 percent, had experienced layoffs during a 16-month period ending in April 2018.