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MNG Enterprises Files Shareholder Presentation on Its 41% Premium Proposal for Gannett and Gannett’s Misguided and Failing Operating Strategy

April 11, 2019

DENVER--(BUSINESS WIRE)--Apr 11, 2019--MNG Enterprises, Inc. (“MNG”), owner and operator of one of the largest newspaper businesses in the U.S. and the largest active shareholder in Gannett Co., Inc. (NYSE:GCI) (“Gannett”), with an approximate 7.4% ownership interest, today delivered its presentation to Institutional Shareholder Services (“ISS”) in connection with Gannett’s 2019 Annual Meeting of Stockholders. The full presentation can be downloaded at www.SaveGannett.com, and will be filed with the Securities and Exchange Commission (“SEC”) and accessible at www.sec.gov.

The presentation details the track record of value destruction, poor capital allocation and lack of accountability demonstrated by the Gannett Board of Directors, including:

  • A 93% decline in Net Income since spin-off; 1
  • A 93%decline in Diluted EPS since spin-off; 1
  • An 87% decline in Operating Income since spin-off; 1
  • A 52% decline in Free Cash Flow since spin-off; 1
  • A 41% decline in market value since spin-off; 2
  • A 24% decline in Adjusted EBITDA since spin-off; 1
  • Undisciplined capital allocation, spending ~$350mm 3 on digital acquisitions while Diluted EPS has declined by 93% since spin-off; 1
  • An increase in capital structure risk, moving from a net cash position of $62mm as of June 28, 2015 to a net debt position of $211mm as of December 31, 2018;
  • Underperforming its peers, 4 the S&P 500, and the Russell 2000 by 15%, 51%, and 37%, respectively, since spin-off; 5 and
  • Granting the highest CEO compensation over the past 3 years compared to peers 4,6 despite Gannett’s underperformance.

The presentation also details Gannett’s failure to respond adequately to MNG’s 41% premium, 7 $12.00 per share cash proposal and requests by, among other things, failing to engage meaningfully with MNG, preventing MNG from conducting due diligence in order to finalize a financing package, refusing to conduct a formal review of strategic alternatives to maximize value for all shareholders, and failing to commit to a feasible, strategic and financial path forward before hiring a new CEO.

Further, the presentation sets forth the compelling value of MNG’s 41% premium 7 cash offer and path to completion, the lack of relevant experience of Gannett’s nominees to execute a turnaround strategy, and the strong operational experience of MNG’s nominees to execute a value enhancing strategy during the pendency of a strategic review.

Additional information about MNG, its proposal to acquire Gannett, and its six nominees for election to Gannett’s Board of Directors is available at www.SaveGannett.com.

Moelis & Company LLC is acting as financial advisor to MNG. Akin Gump Strauss Hauer & Feld LLP and Olshan Frome Wolosky LLP are serving as its legal counsel. Okapi Partners LLC is acting as MNG’s proxy solicitor.

About MNG Enterprises

MNG Enterprises, Inc. is one of the largest owners and operators of newspapers in the United States by circulation, with approximately 200 publications including The Denver Post, The Mercury News, The Orange County Register and The Boston Herald. MNG is a leader in local, multi-platform news and information, distinguished by its award-winning original content and high quality, diversified portfolio of both print and local news and information web sites and mobile apps offering rich multimedia experiences across the nation. For more information, please visit www.medianewsgroup.com.

Additional Information

MNG Enterprises, Inc., together with the other participants in its proxy solicitation (collectively, “MNG”), have filed a definitive proxy statement and an accompanying BLUE proxy card with the Securities and Exchange Commission (the “SEC”) to be used to solicit votes for the election of MNG’s slate of highly-qualified director nominees at the 2019 annual meeting of stockholders (the “Annual Meeting”) of Gannett Co., Inc. (the “Company”). Stockholders are advised to read the proxy statement and any other documents related to the solicitation of stockholders of the Company in connection with the Annual Meeting because they contain important information, including additional information relating to the participants in MNG’s proxy solicitation. These materials and other materials filed by MNG in connection with the solicitation of proxies are available at no charge on the SEC’s website at www.sec.gov. The definitive proxy statement and other relevant documents filed by MNG with the SEC are also available, without charge, by directing a request to MNG’s proxy solicitor, Okapi Partners LLC, at its toll-free number (888) 785-6668 or via email at info@okapipartners.com.

1 Changes in Gannett financial results since its 2015 spin-off from its former parent company reflect changes in trailing 12-month financials from June 28, 2015 to December 31, 2018.

2 Based on change in market capitalization from June 29, 2015 to January 11, 2019 per S&P Capital IQ.

3 Digital acquisitions include ReachLocal, SweetIQ and WordStream.

4 Peers include Graham Holdings Company, Lee Enterprises, Incorporated, Meredith Corporation, The McClatchy Company, New Media Investment Group Inc., The New York Times Company, Scholastic Corporation, and Tribune Publishing Company; selected by MNG based on criteria including revenue, exposure to print publishing and footprint across multiple markets.

5 Represents total shareholder return from June 29, 2015 to January 11, 2019 per S&P Capital IQ.

6 Excludes New Media Investment Group Inc. due to CEO compensation not disclosed.

7 Based on Gannett’s December 31, 2018 closing share price.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190411005862/en/

CONTACT: MEDIA:

Reevemark

Paul Caminiti / Hugh Burns / Renée Soto

+1 212.433.4600

MNGInquiries@reevemark.comINVESTORS:

Okapi Partners LLC

Bruce Goldfarb/Pat McHugh

+ 212.297.0720

info@okapipartners.com

KEYWORD: UNITED STATES NORTH AMERICA COLORADO

INDUSTRY KEYWORD: COMMUNICATIONS MARKETING PUBLISHING

SOURCE: MNG Enterprises, Inc.

Copyright Business Wire 2019.

PUB: 04/11/2019 04:30 PM/DISC: 04/11/2019 04:30 PM

http://www.businesswire.com/news/home/20190411005862/en