MNG, which held a 7.5 percent stake in Gannett as of January, said it would consider options including nominating its slate of directors to Gannett’s board, setting the stage for a proxy battle.
Gannett did not immediately respond to a request for comment. The company’s shares were down nearly 5 percent at $10.68 in early trading, compared with MNG’s $12 per share offer.
MNG, which is controlled by secretive hedge fund Alden Global Capital LLC, had offered to buy Gannett, the owner of USA Today, in January.
Gannett said on Monday it had responded to MNG’s offer on Jan 16. and had sought details on how MNG planned to finance the deal.
Gannett said MNG had insisted on a non-disclosure agreement before starting any talks and did not provide any more information about how it planned to execute on its proposal.
MNG, better known as Digital First Media, in its response said Gannett had no credible plan to attain a $12 per share valuation on its own.
The newspaper chain also said it has retained Moelis & Co as its financial adviser and is prepared to discuss with Gannett plans to finance its all-cash proposal.
“Gannett’s ‘pie in the sky’ hopes for its digital businesses are not believable and cannot be counted on to deliver value superior to the immediate and substantial premium being offered by MNG – and that may be available from other parties,” MNG said in a statement.
Reporting by Akanksha Rana in Bengaluru; Editing by Shailesh Kuber