Hearst increased its bid to purchase the Dallas Morning News by $1.50 per share in cash, and Alden Global Capital responded.
DALLAS — A week before shareholders vote on the proposed sale of the Dallas Morning News to Hearst, the would-be buyer is increasing its purchase offer, prompting a response from its competing bidder.
The increased price, which is $1.50 higher than Hearst’s previous offer, was announced as the DallasNews Corporation board is working to fend off a competing buyout offer from MNG Enterprises Inc., a subsidiary of Alden Global Capital.
The board is set to vote on the proposed Hearst merger Sept. 22. The DallasNews Corporation, the holding company of The Dallas Morning News and Medium Giant announced the increase in purchase price Monday, Sept. 19.
To date, MNG has increased its bid three times, increasing its nonbinding offer from $16.50 per share to $18.50 per share in cash, WFAA previously reported. Hearst initially offered to purchase the storied paper for $14 and has since increased his offer to $16.50 per share.
“With this best and final increase to our offer, we are clearly demonstrating our commitment to providing significant value to DallasNews shareholders and further illustrating our belief that DallasNews has a bright future as part of the Hearst family,” Jeff Johnson, president of Hearst Newspapers, said in a letter to shareholders.
In response, MNG raised its offer to purchase DallasNews Corporation to $20 per share, the investment fund announced in a statement Tuesday.
“Our proposal speaks for itself with a whopping approximately 21% premium to Hearst’s ‘best and final’ proposal,” MNG said in a letter to the DallasNews Corporation board of directors. “The path to maximizing value and preserving the future of The Dallas Morning News is clear, and there is no further reason for delay.”
MNG said it will provide a purchase agreement to the board in the coming days in an effort to finalize a transaction.
Hearst is one of the nation’s leading information and technology companies and owns nearly all the major papers throughout the state of Texas. The proposed merger with Hearst is unanimously supported by the DallasNews board of directors and the company’s largest shareholder, Robert W. Decherd whose family previously owned the paper.
“This increased offer from Hearst cements what was already a compelling proposal to deliver significant value to shareholders and secure the future of DallasNews,” Decherd said in a press release from the DallasNews board. “The Hearst Merger has my full support, and I encourage all DallasNews shareholders to join me in approving this transaction both for the value it creates and the demonstrated ability of Hearst to support DallasNews in serving North Texas long into the future.”
The DallasNews board and Decherd previously expressed opposition to the Alden offer, pointing to a controversial track record in the newspaper industry, with a well-documented history of cost-cutting, staff reductions, and reduced coverage of local communities,” the board previously stated.
In its latest increased offer, Alden Global Capital said the board is refusing to engage in discussion about its offer and said it would reserve all rights to pursue “any available avenue to hold you accountable for failing to act in the best interests of almost 90% of all DallasNews shareholders.”
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