(Reuters) - Gannett Co Inc on Monday rejected newspaper chain MNG Enterprises Inc's unsolicited buyout offer, saying it undervalued the company and was not credible.
In January, MNG offered to buy Gannett in a deal valued at $1.36 billion, or $12 per share, that represented a premium of 23 percent to Gannett's closing price on Jan. 11.
Gannett said its board would engage with any party that makes a bona fide, credible proposal that appropriately values the company and is capable of being closed, and MNG's proposal failed that test.
MNG, which held a 7.5 percent stake in Gannett as of January, is controlled by secretive hedge fund Alden Global Capital LLC.
MNG, better known as Digital First Media, said on Jan. 14 it had approached Gannett's board and management on multiple occasions about a potential combination, but the latter had not "meaningfully engaged".
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Gannett, the owner of USA Today, disclosed on Monday it had responded to MNG's offer on Jan 16. offering to arrange a meeting between the companies 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's refusal to respond to any of the board's questions regarding your financing plans, regulatory matters and other issues that relate to your ability to consummate the proposed transaction, the board has serious concerns regarding the credibility of your proposal," Gannett Chairman J. Jeffry Louis wrote in a letter to MNG's board on Monday.
Shares of Gannett were down 1.5 percent at $11.05 before the bell.
MNG could not be immediately reached for comment.
(Reporting by Akanksha Rana in Bengaluru; Editing by Shailesh Kuber)
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