The Wall Street Journal: Digital First Media eyes buyout of USA Today publisher Gannett

A hedge-fund-backed media group known for buying up struggling local papers and cutting costs is planning to make an offer for USA Today publisher Gannett Co., according to people familiar with the matter.

MNG Enterprises Inc., one of the largest newspaper chains in the country, has quietly built a 7.5% position in Gannett’s stock and plans to publicly urge the McLean, Va., publisher to put itself up for sale, the people said.

MNG, better known as Digital First Media, will also offer to buy Gannett GCI, +0.52%   for $12 a share, they said, which would represent a 23% premium over Friday’s closing price of $9.75. The shares, which fell steeply last year, have been rising lately.

Closely held Digital First is known for its contentious history with the newspaper industry in part because of its penchant for slashing costs. It has over the past few years made multiple approaches to Gannett about a deal but has been rebuffed, the people said. At least one approach was made in the past month or so. It isn’t clear whether Gannett will be receptive now. Digital First Media’s largest shareholder is Alden Global Capital LLC, a New York hedge fund that focuses on investing in distressed companies.

An expanded version of this report appears on WSJ.com.

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