Alden/MNG prepares to run activist slate for Gannett board seats

Alden Global Capital, the hedge fund that controls MNG Enterprises, is preparing to run an activist slate of candidates to pressure the Gannett board if it balks at the $1.36 billion takeover offer, sources said.

Gannett, publisher of 109 papers and USA Today, acknowledges receiving the unsolicited bid from MNG on Monday, but was non-committal, pledging only to review the $12-a-share offer.

In its offer letter, MNG Chairman Joe Fuchs warned, “If the board refuses to engage with us in good faith and in a timely fashion, we reserve our rights to take action to protect the value of our investment, which may include seeking changes to the composition of the board.”

Sources tell us that Alden, which is headed by Heath Freeman, is expecting Gannett to balk at the offer. While Alden has turned a profit on the private Digital First Media — media analyst Ken Doctor reported it made a profit of $159 million last year on revenue of $939 million — it has done so via draconian cuts that raised alarms across the beleaguered industry. And other ventures from the vulture investor have tanked in recent years.

“A purchase of Gannett by Digital First Media would result in a dangerous loss of local reporting, more consolidation, and the strip-mining of Gannett’s newspaper assets at a time when the industry demands owners who are committed to reinvestment in journalism and when citizens need local news coverage more than ever,” said a statement from the NewsGuild union, which represents a dozen of MNG’s 100 papers.

The deadline for nominating new board members at Gannett is Feb. 7.