Gannett Climbs on Report of Merger Talks With Gatehouse Media

(Bloomberg) -- Gannett Co., the publisher that owns USA Today, climbed as much as 9.3% on a report that it held merger talks with Gatehouse Media, a deal that would unite the two largest newspaper chains in the U.S.

Gannett also has discussed deals with Tribune Publishing Co. and McClatchy Co., the Wall Street Journal said, citing unidentified people familiar with the matter. Gannett and Gatehouse didn’t immediately respond to requests for comment from Bloomberg News.

Newspapers giants, plagued by diminishing advertising and competition from digital upstarts, are increasingly looking for ways to team up. But Gannett hasn’t welcomed all comers: It spurned a hostile $1.36 billion offer from MNG Enterprises Inc. in January.

MNG -- majority-owned by the hedge fund Alden Global -- also embarked on a failed campaign to get representation on Gannett’s board. At its annual meeting this month, Gannett shareholders rejected the three directors proposed by MNG.

Employees at Gannett feared that an MNG takeover would bring severe job cuts to the struggling company. Gannett has suffered its own layoffs, but the cuts haven’t gone as deep as those made at MNG, owner of the Denver Post, St. Paul Pioneer Press and other daily newspapers.

Shares of Gannett rose as high as $8.34 on Thursday, but drifting back down to $7.81, a gain of 2.4%. New Media Investment Group Inc., which owns Gatehouse, climbed as much as 5%.

Before Thursday’s rally, Gannett was down 11% this year.

To contact the reporters on this story: Nick Turner in Los Angeles at nturner7@bloomberg.net;Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Cécile Daurat

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