tronc (TRNC) had Serious Doubts about Gannett's (GCI) Ability to Finance Transaction

November 1, 2016 9:34 AM EDT
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tronc, Inc. (NASDAQ: TRNC) today issued the following statement in response to the announcement by Gannett Co., Inc. (NYSE: GCI) that it does not intend to pursue an acquisition of tronc at this time.

“We were informed early this morning that Gannett has decided to abruptly terminate discussions regarding a potential business combination with tronc. 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. 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 parties agreed to a purchase price in mid-September and subsequently worked to finalize a Merger Agreement. Last week, Gannett informed tronc that its financing encountered an unexpected delay. 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.

“The Board and management team of tronc remain committed to taking the necessary steps to transform its business in response to the massive changes that have overtaken the publishing industry, supporting the company’s outstanding journalists and, above all, delivering value to shareholders. tronc continues to make progress in implementing the company’s strategic plan to leverage technology and effectively monetize its world class content. The implementation of this plan will take time but the company remains on track in terms of delivering on its near-term financial goals and is confident in its ability to deliver improved performance and shareholder value.”

Goldman, Sachs & Co. and Lazard are acting as financial advisors and Kirkland & Ellis LLP is acting as legal advisor to tronc.

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