Gannett Urges Shareholders To Reject Discounted 'Mini-Tender'

By: Mark Fitzgerald TRC Capital Corporation, which frequently makes unsolicited so-called "mini-tenders" of stock at discounted prices, is targeting Gannett Co. Inc., the nation's largest newspaper chain said Tuesday.

Gannett said it had received notification of the unsolicited offer by TRC to purchase up to 2.5 million shares, or about 1.09% of its common stock, at a price of $29.45 net per share.

"Gannett does not endorse this offer and recommends that stockholders not tender their shares in response to the mini-tender offer," the company said in a statement.

Gannett noted that the price offered represents a 3.88% discount to the stock's $30.64 on May 13, 2008, which it said is the day prior to the date the offer commenced. Gannett stock (NYSE: GCI) closed Tuesday at $29.50 a share, down 30 cents, or 1.01% from its opening.

Like other publicly held newspaper companies, Gannett stock has tanked in the past year, when it has traded in a range of $25.17 to $59.83.

Mini-tender offers are offers to buy less than 5% of outstanding shares of a company. In recent years, TRC Capital has made mini-tender offers for stocks in companies ranging from the medical technology company Medtronic to the railroad operator CSX Corporation.

Companies nearly always recommend shareholder reject the offers, which can contain many conditions, and are usually made at a discount to the stock's current trading price.

Gannett, like other companies facing TRC Capital's offer, noted Tuesday that those making mini-tender offers, unlike tender offers for bigger blocks of stock, are not required to file disclosures or other tender offer documents with the Securities and Exchange Commission (SEC).

"Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price," the SEC says in an advisory on mini-tenders on its Web site.

"It is very important to note that TRC Capital's offer is subject to numerous conditions, including there being no decline in the market price of Gannett's common stock and the availability of financing for the purchase on terms satisfactory to TRC Capital," Gannett said. "Therefore, TRC Capital has no obligation to complete the offer if there is any decline in the market price of our shares. In addition, TRC Capital may amend its offer, including an amendment to reduce its offering price."

Gannett also advised stockholders who have already tendered shares to TRC Capital that they can withdraw their shares by giving written notice by noon on Friday, June 13.