Gannett / MNG proxy battle: Gannett board members re-elected

Gannett shareholders voted against MNG Enterprises' board of directors alongside US owner TODAY, who is trying to counter a hostile takeover attempt by the hedge-controlled media company funds.

Gannett Chairman J. Jeffry Louis announced Thursday morning that the company's shareholders had supported the eight board members who stood for re-election, according to preliminary results of the vote. The three nominees proposed by MNG Enterprises of Alden Global Capital failed to secure a seat on the board.

Preliminary results were revealed at Gannett's annual meeting. Certified official results will be filed in a few days. Voting totals were not immediately available. The audience applauded when the results were announced.

Bernard Lunzer, president of the NewsGuild union, congratulated Gannett for taking a stand against the MNG candidates.

"I congratulate Gannett for continuing to believe in sustainable journalism," said Lunzer. "It's a difficult task right now. We believe that there is a solid future.

In January, MNG made an unsolicited bid to acquire Gannett at a price of $ 12 per share. Gannett rejected the offer as being non-credible and argued that MNG's candidates had potential conflicts of interest.

Although MNG can still pursue an acquisition, its inability to secure Gannett's board of directors reflects a significant decline in its efforts. With seats on the board, MNG could have been agitating for a potential deal.

MNG has not indicated whether it will continue its campaign to acquire Gannett.

"This is a victory for a deep-rooted Gannett board that refuses to adapt to the current reality of the newspaper industry, and sadly a loss for Gannett and his shareholders," said MNG in a statement. we hope the outgoing Gannett Council will change course to take a modern approach to local news that saves newspapers and serves communities. It would be the best result. If Gannett's board does not change course and does not pay too much for non-core, ambitious and dilutive digital deals, we think the stock will fall further. "

Securities advisors Institutional Shareholder Services and Glass Lewis questioned MNG's ability to fund the offering but said that $ 12 per share would be a reasonable starting point for discussions. The Gannett stock closed Wednesday at $ 8.87 per share.

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The members of the Gannett Board who have been re-elected are John Jeffry Louis, John E. Cody, Stephen Coll, Donald Felsinger, Lila Ibrahim, Lawrence S. Kramer, Debra A. Sandler and Chloe R. Sladden.

MNG, also known as Digital First Media, nominated three members: Steven Rossi, former president of MNG, Dana Goldsmith Needleman, principal of the Cogent group, Alden, president, and Heath Freeman, vice president of MNG .

ISS supported Rossi but did not approve the other two. Glass Lewis has not endorsed any of MNG's nominees.

MNG had previously appointed six people to the board of directors, but withdrew three from the extensive review of Alden's record of investment reductions and errors.

Gannett said he has a workable plan for digital transformation while controlling costs. MNG submitted that Gannett should stop investing in digital businesses and should "reduce overhead costs".

Critics say MNG's track record of implementing strong cost reductions in its newspapers, including the Denver Post and the San Jose Mercury News, is not a recipe for growth.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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