Milwaukee Journal Sentinel office building
There’s a new wrinkle in the pending GateHouse Media bid to merge with Gannett, owner of the state’s largest daily newspaper.
Last week, the hedge fund subsidiary that owns Digital First Media, MNG Enterprises, told the SEC it had taken a 9.4% stake in New Media Investment Group, the owner of GateHouse and the vehicle through which the proposed GateHouse-Gannett combination was to be completed.
The move is significant because Gannett — which owns the Milwaukee Journal Sentinel and 10 other Wisconsin papers — earlier this year rebuffed Digital First’s acquisition bid.
MNG told the SEC it was “evaluating the terms” of the New Media-Gannett deal. It suggested that transaction might “not be in the best interest” of New Media shareholders and hinted it might vote against the merger. “This could be seen as a play by MNG to scoop up Gannett for itself after its failed bid earlier this year,” CNN reported.
While a GateHouse-Gannett combination has already sparked fears of more cuts and consolidations at Gannett’s 11 Wisconsin dailies, MNG/Digital First would be no white knight should it succeed in resurrecting its bid.
As Urban Milwaukee editor Bruce Murphy observed this week, Digital First has an even more ruthless reputation for newsroom budget-cutting than Gannett or GateHouse. Noted CNN: “Last year, employees at the Denver Post gained national support when they rose up against what their editorial board termed the ‘vultures’” of Alden Global Capital, Digital First’s hedge fund owner.
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