Named after Nancy Reagan’s anti-drug campaign, the “just say no” defense has had varying degrees of success, according to Steven Davidoff Solomon, a professor of law at the University of California, Berkeley. “Yahoo used it to fight off a $44.6 billion bid from Microsoft eight years ago,” he writes in The New York Times. “Though some dispute how serious Microsoft was at the end, Yahoo’s initial rebuff looks like a clear mistake in retrospect, as its core business recently sold for $4.8 billion.”
The risk in this strategy is that The Courier-Journal’s owner, Gannett Co., walks away instead of acquiring Tronc, leaving its rival newspaper publisher to wither like Yahoo or find its own path to success, Solomon says. And if you accept Gannett’s argument, that would effectively leave the CJ and all its 108 other sister publications in a less competitive position in a future dominated by digital media.
So far, however, Tronc appears to be winning. Gannett’s initial offer last April was $12.25 a share, or $815 million. It boosted it to $15 the next month, or $864 million. And a published report last week says Gannett raised it again, to around $18 — even as Tronc is holding out for something closer to $20.
But that report by industry watcher Ken Doctor said it appeared Tronc would ultimately agree to a deal: “It’s apparently no longer a question of whether to sell or not, but for how much.”
If it wins, Gannett would add the L.A. paper, plus the Chicago Tribune, seven other big dailies and 160 smaller weekly and monthly niche titles to its existing portfolio of 109 publications in the U.S. and U.K. It would also add 7,000 Tronc employees to the nearly 19,000 it already employs.