Tribune gets $70.5 million investment, rejects Gannett offer

(Reuters) - Tribune Publishing Co TPUB.N, owner of the Los Angeles Times and the Chicago Tribune, said Los Angeles billionaire Patrick Soon-Shiong has invested $70.5 million in the company, becoming its second largest shareholder.

Tribune also rejected Gannett Co Inc's GCI.N latest takeover offer of $15 per share, but said on Monday that it would allow Gannett, the publisher of USA Today, access to some confidential corporate information. Reuters first reported the news Sunday.

Tribune’s shares closed down 15 percent on Monday.

Soon-Shiong, through his fund Nant Capital LLC, will hold about 12.9 percent in Tribune and join the publisher’s board as vice chairman on June 2.

Soon-Shiong, a South African-born surgeon, is part-owner of the Los Angeles Lakers basketball team and a founder of two drug companies, which he sold for a total of $8.6 billion.

Nant Capital has also entered into a standstill agreement with Tribune, limiting its ability to raise its stake in the publisher.

Soon-Shiong is also chairman and chief executive of biotech company NantKWest Inc NK.O and is one of the highest paid chief executives in America. He took NantKWest public last June.

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While Tribune rejected Gannett’s latest takeover offer, it invited Gannett to agree to a “mutual non-disclosure agreement” to share information about a potential deal. The agreement, which has not been signed by either company, has become a source of contention.

Gannett first said in a statement that the proposed non-disclosure agreement “would require Gannett to effectively cease any public proxy solicitation or other public pursuit of a transaction.”

Tribune, in response, said that the agreement it offered does not prevent Gannett from continuing to pursue its withhold campaign or other proxy contests.

Gannett responded by saying the agreement does not have a restriction against a proxy contest, but it does restrict public disclosures that could inhibit a proxy fight. It said Tribune is asking Gannett not to include references to discussions or negotiations in proxy statements or tender offer documents, and that its advisers are preparing a revised version.

Last week, Gannett asked Tribune Publishing shareholders to withhold support for the latter’s eight nominees to the board of directors at its annual meeting June 2.

Proxy adviser Institutional Shareholder Services Inc recommended that Tribune shareholders vote for the nominated directors.

Oaktree Capital Management LP, a major shareholder of Tribune, is also pushing for a deal with Gannett and urged the company to form an independent board to consider the proposal.(

Reporting by Narottam Medhora in Bengaluru and Liana B. Baker in San Francisco; Editing by Kirti Pandey and Leslie Adler