DallasNews Corporation, The Dallas Morning News’ parent company, formally rejected a bid from Alden Global Capital’s MediaNews Group to acquire the paper.
MediaNews Group submitted an unsolicited bid for the 140 year-old paper, offering $2.50 more per share last week. That offer came after Hearst announced its own bid to buy the paper.
DallasNews Corporation’s board said it rejected Alden’s offer and announced other steps it took to fend off future attempts from Alden Global Capital to swoop in.
First, the board implemented a shareholder rights plan, a disincentive against MediaNews Group attempting to acquire further stakes in DallasNews. The maneuver is also sometimes called a “poison pill.”
The plan would ensure all other shareholders also had the opportunity to increase their shares, if an individual or an entity attempted to acquire ownership beyond a certain threshold.
MediaNews Group currently owns about 9.9% of DallasNews’ Series A stock, and the shareholder rights plan would go into effect if MediaNews Group increased its ownership to 10%.
This measure would prevent MediaNews Group’s ability to control a significant percentage of shares and scuttle the deal with Hearst.
Second, Hearst and DallasNews amended their original deal to raise the sale price to $15 cash per share. The price is $1.50 per share shy of MediaNews Group’s offer, but the board issued a statement affirming its belief that the deal with Hearst is in the company’s “best interests.”
Finally, DallasNews’ statement shared that Robert W. Decherd, the controlling shareholder, stated that there is “no scenario in which he will vote in favor of a sale of the Company to Alden or its affiliates.”
Decherd is a great-grandson of one of The Morning News’ cofounders and the former chair president and CEO of the DallasNews board.
NOTE: KERA collaborates with The Dallas Morning News on Arts Access, an arts journalism partnership. This article was published without prior review from The Dallas Morning News.
