MNG Enterprises offers $12 a share for USA Today publisher Gannett

MNG Enterprises, which owns The Denver Post and The Boston Herald, has offered to buy USA Today publisher Gannett for $12 per share.

MNG, which is Gannett's largest active shareholder with a 7.5% stake, said it had approached Gannett's board on several occasions about a potential strategic combination but that the company had not "meaningfully engaged".

MNG sent a letter to shareholders arguing that Gannett has suffered from "a series of value-destroying decisions made by an unfocused leadership team".

This includes a "overpaying for a string of non-core aspirational digital deals and pursuing an ill-fated hostile for Tribune Publishing, all while Gannett’s core revenue, EBITDA, margins and free cash flow continue to decline".

MNG noted that the company has lost 41% of its value since its IPO two and half years ago, significantly underperforming it peer group and indices.

"Frankly, the team leading Gannett has not demonstrated that it’s capable of effectively running this enterprise as a public company," it said, adding that with the company's chief executive officer leaving by May and its key digital executive leaving later this month, there’s now an even greater leadership void.

"Gannett shareholders cannot sit by and watch further value erode while the board casts about for a strategy and a leader, especially when there is an opportunity to maximise value right now. We believe Gannett shareholders deserve better," MNG said

The offer price of $12 per share represents a 41% premium to Gannett's year-end 2018 closing price and a 23% premium to the stock's closing price on Friday.

At 1230 GMT, Gannett shares were up 19.6% in pre-market trade at $11.66.