One of Gannett Co. Inc.'s largest shareholders is resisting an attempt by the Rosslyn-based media company to adopt antitakeover provisions and is threatening to enlist the help of Gannett's large institutional stockholders to block the proposals.
Cincinnati-based American Financial Corp., which is controlled by financier Carl Lindner, said in a filing with the Securities and Exchange Commission yesterday that it "believes that these proposals are not in the best interests of Gannett's shareholders and would adversely affect the market value of Gannett's common stock."
But Gannett, which is asking shareholders to approve the provisions at its annual meeting next month, said it believes they would boost the company's stock price, in fact.
"We have carefully considered, and we respect, Mr. Lindner's views as a shareholder representing about 5 percent of Gannett's outstanding stock, but we believe most of the other 95 percent of our shareholders favor the . . . proposals and we shall continue to actively solicit proxy votes for approval," Gannett Chairman Allen H. Neuharth said in a statement.
"The board of directors of Gannett believes that all shareholders of the company should benefit fairly and equally from further increases in the value of Gannett stock," Neuharth said. "The proposed amendments are to help ensure that."
The proposals being made by Gannett -- the publisher of USA Today and dozens of other newspapers -- are not unlike many being adopted by American corporations as a defense against the recent wave of takeover activity. One measure would stagger the terms of Gannett's directors, making it harder for a corporate raider to change a majority of board members and take control. The other would prevent a "two-tier" takeover offer for the company, in which stockholders who quickly sell their stock to a potential acquirer receive more than those who hold out, by requiring a potential suitor to make the same offer -- known in the vernacular as a "fair price" -- to all Gannett shareholders.
Gannett shareholders are to vote on the proposals at their annual meeting May 21.
American Financial -- which revealed in the same filing that it had bought 351,000 shares of Gannett on Wednesday to boost its holding to just over 4 million shares -- said it "is considering seeking support from institutional investors to defeat these proposals and/or soliciting proxies to vote against such proposals," according to the filing.
Lindner, who several years ago was considered a leading corporate raider, has been relatively inactive in the past few of years. American Financial first became an investor in Gannett in 1979, when it received 3.9 million shares of the company in exchange for its holdings in Combined Communications.