Gannett Co. and Tronc Inc. have bridged a valuation gap that caused months of friction, but are still hammering out the details of a transaction, people familiar with the situation said.
The parties haven’t reached a final agreement, and an announcement isn’t imminent, said the people, who asked not to be identified because the matter is private. Gannett, the owner of USA Today, is in talks to buy Tronc for $18.50 to $19 a share, the people said. While negotiations are advanced, talks could still fall apart.
Gannett has also been in talks to raise financing from Jefferies Group LLC, another person said.
By acquiring Tronc, Gannett would gain the Los Angeles Times, Chicago Tribune and Baltimore Sun, among other large metropolitan newspapers, which would give the McLean, Virginia-based company greater scale in the face of online competition and make it more appealing to national advertisers.
This year, Gannett has bought Milwaukee Journal Sentinel publisher Journal Media Group and agreed to purchase North Jersey Media Group, the owner of the Record of Bergen County, for $156 million.
A deal would end months of acrimony between the companies as Tronc Chairman Michael Ferro rebuffed Gannett’s overtures in favor of a plan to produce more video and distribute stories to more readers.
Gannett made two previous offers — one in April for $12.25 a share and a second in May for $15 a share. Tronc’s board rejected both as too low and not in shareholders’ best interests. Ferro renamed the Chicago-based newspaper chain, formerly known as Tribune Publishing, amid the hostile takeover attempt.
Newspapers have been feasting on each other as they contend with declining circulation and ad revenue while trying to find successful business models for the digital age.
Last year, the business saw the most deals for the largest amount of money since the 2008 financial crisis, according to Dirks, Van Essen & Murray. The firm, which specializes in advising on newspaper mergers and acquisitions, said 70 daily papers were sold in 2015 for a combined $827 million.
Representatives for Gannett and Tronc declined to comment. A Jefferies representative also declined to comment.