Gannett on Tuesday walked away from its attempted takeover of Tronc, the publisher of the Los Angeles Times, Chicago Tribune and other major dailies.
USA Today publisher Gannett's target was elusive from the beginning, with a publicly contentious back-and-forth between the two companies. Tronc, formerly known as Tribune Publishing, rejected at least two bids from Gannett because it said it preferred to go it alone , focusing on tech-driven initiatives involving artificial intelligence and global expansion in entertainment news and video.
Shares of Tronc Inc. plunged 20 percent in early trading.
Tronc said Tuesday that it had come to an agreement on price, however, agreeing to an (undisclosed) amount in mid-September. (The last publicly rejected offer was for $864 million, including about $385 million in debt.) Tronc said in a statement that Gannett was unable to pull together the money it needed to complete the deal.
Gannett, based in McLean, Virginia, had hinted at problems during its earnings call last week when CEO Robert Dickey said it had to make sure that "financing terms make sense" and that the company, with a long string of newspaper acquisitions under its belt, would not "add properties for the sake of adding properties."
Print ad revenues have been falling for years across the industry, and growth in digital ads and online-only subscriptions has not been enough to offset that.
Gannett has dealt with those trends by snapping up newspaper companies and cutting jobs, saying last week that it was laying off 2 percent of its workers . Dickey said last week that the company was still interested in building its local-news footprint, suggesting that smaller deals might be coming. Gannett this year has already bought Journal Media Group, the publisher of the Milwaukee Journal Sentinel, Knoxville News Sentinel and other papers, as well as the North Jersey Media Group, which publishes The Record and other papers around that state.
Tronc says it will stick to its previous plan, focusing on technology and video initiatives born under Chairman Michael Ferro. Ferro, who owned a stake in cross-town rival Chicago Sun-Times. He had himself just become an insider after investing $44.4 million in Tronc in February when Gannett made its bid. He brought on California entrepreneur Dr. Patrick Soon-Shiong as an investor to help fend off Gannett.
Tronc is scheduled to report its latest financial results later Tuesday.
Shares of Gannett Co. rose more than 3 percent Tuesday.