Unanimously Recommends that Shareholders Vote “FOR ALL” of Gannett’s
Eight Experienced, Engaged and Independent Director Nominees on the
WHITE Proxy Card
MCLEAN, Va.–(BUSINESS WIRE)–Gannett Co., Inc. (NYSE: GCI) today sent an open letter to shareholders
urging shareholders to vote “FOR ALL” of the company’s highly
experienced, fully independent director nominees on the WHITE proxy card
in connection with Gannett’s 2019 annual meeting of shareholders
scheduled to be held on May 16, 2019.
The full text of the letter follows below:
Dear Fellow Shareholder,
At the upcoming Annual Meeting on May 16, 2019, you will make a very
important decision regarding the composition of the Gannett board that
will shape the future of the company and have a lasting impact on the
value of your investment.
In recent weeks, we have appreciated having the opportunity to speak
with many of you about our ongoing digital transformation and the
progress we are seeing, as well as the efforts by MNG Enterprises, Inc.
(“MNG”), a direct competitor of Gannett, and its majority shareholder
Alden Global Capital (“Alden”) to take control of the company by
installing their own directors, officers, colleagues and friends on the
Gannett board – all while touting an unsolicited proposal to buy Gannett
that they cannot finance or close. Now, in a last-ditch, desperate
effort, MNG has announced that it is reducing the number of candidates
that it is nominating for election to Gannett’s eight-member board from
six to three.
Importantly, the number of MNG nominees does not matter, as each of the
three remaining MNG candidates still has irreconcilable conflicts of
interest given each nominee’s close affiliations with MNG and/or Alden,
and cannot be expected to act in the best interests of all Gannett
shareholders. Further, MNG’s candidates have backgrounds and skillsets
that we believe would not be additive to the Gannett board, and, indeed,
would reduce the quality of the Gannett board to the detriment of both
the company and its shareholders. In contrast, all eight of Gannett’s
director nominees are FULLY independent and bring broad and diverse
backgrounds, professional experience and skills in areas that are
critical to Gannett’s business and future success. We believe that
electing even one of MNG’s nominees to the Gannett board would put the
value of your investment at risk.
Your vote is very important. We encourage you to protect the value of
your investment in Gannett by voting “FOR ALL” of your board’s eight
independent nominees on the WHITE proxy card today.
MNG’S CANDIDATES ARE HIGHLY CONFLICTED
All of MNG’s candidates have clear conflicts of interest, which we
believe would prevent them from being able to meaningfully fulfill their
duties as Gannett directors:
Heath Freeman is the president and a founding member of Alden,
vice chairman of MNG and chairman of the board of Fred’s, Inc., where
he was appointed to the board pursuant to a Cooperation Agreement
between Fred’s and Alden.
Steven Rossi was CEO of MNG until his retirement in November
2017 and currently serves as a director on the Fred’s board after
being appointed to the board pursuant to the same Cooperation
Agreement as Mr. Freeman.
Dana Goldsmith Needleman is also a director of Fred’s, as well
as a family friend of Mr. Freeman. They have known each other for
years prior to Ms. Needleman being hand-picked to serve on the Fred’s
board, including through business dealings, charitable organizations,
a shared alma mater and documented social gatherings. Further, Ms.
Needleman’s spouse represented Alden in real estate dealings, and Ms.
Needleman made a sizeable personal donation to one of their alma
mater’s organizations where Mr. Freeman is chairman of the advisory
board. In short, it cannot reasonably be concluded that Ms. Needleman
has “no material relationship” with Alden, and she is therefore NOT
independent of MNG.
Because of the significant and concerning conflicts of interest
resulting from MNG’s candidates’ affiliations with a direct competitor
and/or the controlling owner of a direct competitor, MNG’s candidates
may face significant restrictions on the company information to which
they could have access, meaning they could not benefit from the same
information available to Gannett’s independent director nominees and
would not be able to participate fully in decisions critical to creating
value for our shareholders.
MNG’S CANDIDATES WOULD REDUCE THE QUALITY OF THE GANNETT BOARD
As part of the board’s nomination process this year, the Nominating and
Public Responsibility Committee and the full Gannett board reviewed
MNG’s six proposed nominees, and unanimously concluded that NONE would
bring incremental expertise to the board, and indeed would worsen the
quality of the board in terms of skills and experience.
Mr. Freeman, Mr. Rossi and Ms. Needleman have nearly no public board
experience outside of serving together on the board of Fred’s, the
Alden-controlled regional pharmacy chain. At Fred’s, they have overseen
significant value destruction – with Fred’s stock declining 92% since
Alden invested in December 2016, despite Fred’s operating in a steadily
growing market.1 Mr. Freeman’s only other public board
experience was at Emmis Communications Corp in 2010, where he was
appointed not due to his qualifications but instead in connection with
an Alden agreement to take Emmis private. He resigned a few months later
after Alden pulled out of the deal.
In contrast, all of Gannett’s independent nominees, including the three
nominees MNG is seeking to replace, have a wealth of professional
experience and expertise critical to Gannett’s operations and digital
transformation, including finance, business development and strategic
planning, M&A, digital media, journalism, marketing and advertising,
technology and human resources. While MNG claims that it wants to focus
on Gannett’s publishing business, MNG is now attempting to replace
three directors on Gannett’s board, including two distinguished
journalists, Stephen Coll and Larry Kramer, with a hedge fund president,
a real estate dealmaker and a propane company manager turned newspaper
executive without any background in journalism.
MNG’S INTERESTS ARE NOT ALIGNED WITH THOSE OF OTHER SHAREHOLDERS AND
MNG’S FALSE AND MISLEADING STATEMENTS SEEK ONLY TO ADVANCE ITS
INTERESTS, NOT THOSE OF ALL SHAREHOLDERS
Contrary to MNG’s claims, MNG has NOT demonstrated an ability to
position acquired newspapers for long-term profitability. It has been
widely documented that MNG has drastically reduced jobs at its
newspapers, thereby undercutting the papers’ ability to produce quality
journalism and retain subscribers. Once subscribership falls due to lack
of meaningful content, MNG responds with yet more cost cuts, and in some
cases, closures of the papers all together.
In addition to MNG’s baseless claims of having executed revivals of
print newspapers, MNG is intentionally misleading shareholders in its
calculations of Gannett’s performance and the illusory premium it offers
shareholders. Even after Gannett clearly identified flaws in MNG’s
calculations, MNG continues to make the same claims:
MNG compares Gannett’s 2018 results to a time when Gannett was not
even a standalone company and ignores that the company’s digital
marketing solutions business was built beginning in the second half of
2016, with its contribution to performance only being reflected
MNG compares Gannett’s performance to companies outside its industry
peer group and arbitrarily compares the “premium” of its illusory
proposal not to Gannett’s unaffected stock price (as would be
customary) but instead to the lowest closing price for Gannett’s
shares in its entire 52-week range, taking advantage of the sharp
decline the entire stock market experienced in December 2018.
GANNETT’S NOMINEES ARE COMMITTED TO ACTING IN THE BEST INTERESTS OF
ALL GANNETT SHAREHOLDERS
Your board and management team are executing a multi-year transformation
strategy to position Gannett to thrive in a digital future. We are the
first to acknowledge that transformations are hard and take time, and
that we have more work to do. That said, we are confident that the steps
we have taken – and are continuing to take – provide the best path
forward for our company to deliver value in the near term. Our focused
strategy to enhance Gannett’s growth and profitability is centered
Leveraging our nationwide scale and local presence to expand and
deepen our relationships with consumers and businesses;
Accelerating organic digital revenue growth through innovative
consumer experiences and new marketing and advertising solutions;
Pursuing accretive growth through disciplined, selective acquisitions
that provide synergies with our customer base and markets; and
Aligning costs within our legacy print business in a thoughtful and
The financial results our strategic initiatives have delivered to date
reflect our progress and the potential for Gannett’s digital investments
to serve as a growth engine for many years into the future. In 2018
Grew digital subscribers by 46%, bringing total paid digital-only
subscribers to over 500,000.
- Grew ReachLocal revenues by 15%.
Grew national digital advertising revenue by 19%, with 75% of USA
TODAY’s advertising revenue now digital.
Still, our board regularly evaluates our strategic options to ensure
that we are best positioned to deliver value for our shareholders.
Indeed, we have publicly stated that we would engage with any party that
makes a bona fide, credible proposal that appropriately values the
company and is capable of being closed. MNG’s illusory proposal
continues to fail our test.
VOTE TODAY “FOR ALL” OF GANNETT’S INDEPENDENT, EXPERIENCED DIRECTOR
NOMINEES ON THE WHITE PROXY CARD
While we still have work to do, the fact is that Gannett’s USA TODAY
NETWORK strategy, digital transformation and focus on client
relationships are paying off. Our director nominees have the skills and
experience we need to continue to oversee this strategy and make the
right decisions to maximize value for all
Gannett shareholders. Importantly, all eight of your director nominees
are committed to acting in your best interests, and are not beholden to
or influenced by any outside entity. The same cannot be said about even
one of MNG’s candidates.
We believe your vote will impact the value of your investment – please
vote TODAY “FOR ALL” of Gannett’s eight independent director nominees.
We thank you for your continued support.
J. Jeffry Louis, Chairman of the Gannett board of directors
If you have any questions, or need assistance in voting your
INNISFREE M&A INCORPORATED
TOLL-FREE at 1-877-456-3507
Additional materials regarding the board of directors’
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused
media and marketing solutions company committed to strengthening
communities across our network. With an unmatched local-to-national
reach, Gannett touches the lives of more than 125 million people monthly
with our Pulitzer-Prize winning content, consumer experiences and
benefits, and advertiser products and services. Gannett brands include
USA TODAY NETWORK with the iconic USA TODAY and more than 100 local
media brands, digital marketing services companies ReachLocal,
WordStream and SweetIQ, and U.K. media company Newsquest. To connect
with us, visit www.gannett.com.
This communication contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements that are not
historical facts. The words “believe,” “expect,” “estimate,” “could,”
“should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project” and
similar expressions, among others, generally identify forward-looking
statements, which speak only as of the date the statements were made and
are not guarantees of future performance. Where, in any forward-looking
statement, an expectation or belief as to future results or events is
expressed, such expectation or belief is based on the current plans and
expectations of our management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
Whether or not any such forward-looking statements are in fact achieved
will depend on future events, some of which are beyond our control. The
matters discussed in these forward-looking statements are subject to a
number of risks, trends, uncertainties and other factors that could
cause actual results or events to differ materially from those
projected, anticipated or implied in the forward-looking statements,
including the matters described under the heading “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in the company’s annual report on Form 10-K for fiscal
year 2018 and in the company’s other SEC filings.
1 Based on Fred’s
closing stock prices on April 18, 2019, and December 21, 2016 (the day
prior to the filing of Alden’s initial 13D). Market growth source:
Euromonitor. Statement based on 13-18 CAGR of 3% for
drugstores/parapharmacies in the U.S.
For investor inquiries:
President, Financial Planning & Investor Relations
Crozier / Jennifer Shotwell / Larry Miller
For media inquiries:
Vice President, Corporate Events & Communications
Trissel / Nick Lamplough / Tim Ragones
Joele Frank, Wilkinson