Tribune Again Rejects Gannett Takeover Offer;gets $70.5 Mln Investment From Nant

(RTTNews) - Tribune Publishing Co. (TPUB) said that its Board has again rejected the Gannett (GCI) proposal as not in the best interests of Tribune shareholders but invited Gannett to agree to a mutual Non-Disclosure Agreement under which both parties could engage in due diligence and discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated. There can be no assurances that any such agreement can be reached.

Tribune Publishing noted that its Board of Directors has thoroughly evaluated the revised proposal by Gannett Co. to acquire all of Tribune Publishing for $15.00 per share in cash.

"The Gannett $15.00 per share proposal for all of Tribune is clearly inadequate as a control investment in Tribune and, as ISS has pointed out, our Board 'has grounds to decline to engage' on Gannett's proposal," said CEO, Justin Dearborn.

In a separate press lease, Tribune Publishing said that it has entered into an agreement under which it will receive a $70.5 million growth capital investment from Nant Capital, LLC, which was founded by Dr. Patrick Soon-Shiong, in exchange for Tribune common stock.

Tribune has agreed to issue an aggregate of 4.70 million shares of its common stock to Nant Capital at $15.00 per share to support the Company's transformation strategy. The shares to be purchased by Nant Capital, similar to those purchased in the February 4, 2016, investment by Merrick Media, are subject to a three-year lock up.

In connection with the transaction, Dr. Patrick Soon-Shiong has been invited to join the Tribune Publishing Board of Directors as Vice Chairman. He will begin serving on June 2, 2016.

Following the transaction, Nant Capital will own approximately 12.9% of Tribune Publishing's outstanding shares, making Nant Capital Tribune's second largest shareholder. Nant Capital has entered into customary standstill arrangements, including limitations on additional share acquisitions and an agreement to vote its shares in connection with the election of directors and any change of control transaction involving the Company proportionally to how all other shares of Tribune common stock are voted.

Tribune Publishing also announced it has entered into a term sheet with NantWorks, LLC for a co-exclusive, non-transferable, fee-bearing license pursuant to which Tribune will receive access to over 100 machine vision and artificial intelligence technology patents for news media applications as well as access to and use of studio space made available by NantStudio, LLC, a subsidiary of NantWorks, LLC.

Under the term sheet, Tribune Publishing will issue to NantStudio, LLC 333,333 shares of Tribune common stock and will be entitled to retain the first $80 million in revenues derived from the licensed patents royalty free, after which Tribune will pay to NantWorks a 6% royalty on subsequent revenues.