USA Today publisher Gannett said Monday its board unanimously rejected a $1.4 billion takeover offer from rival Digital First Media that would merge two of the largest US newspaper groups. A statement said the offer last month from hedge fund-backed Digital First "undervalues Gannett and is not in the best interests of Gannett and its shareholders."
Gannett also maintained that it does not believe the offer is "credible," doubting the ability of the rival newspaper group to finance the deal and win regulatory approval. McLean, Virginia-based Gannett, which also owns several large regional US dailies, said it was confident of its strategy to remain independent.
"Our board of directors is confident that Gannett has significant value creation potential," said Jeffry Louis, chairman of the Gannett board. "We know there are challenges that face us and our industry. We firmly believe, however, that given our operational expertise, our focus on evolving our business model, and our unwavering commitment to remaining a trusted source of news, we are uniquely positioned to grow this company and its valuable assets." Digital First, which is controlled by the New York hedge fund Alden Global Capital, has a reputation for buying struggling newspapers and then slashing costs. It operates dozens of newspapers including the Denver Post in Colorado and San Jose Mercury News in California.
At the Denver Post, Digital First has been locked in confrontation with the staff of that paper, who claim editorial interference and oppose deep staff cuts.