New York Post, Tuesday, August 13, 2019nypost.com23By JOSH KOSMAN
and KEITH J. KELLYHedge fund activist Leon
Cooperman is wavering in his
earlier support for the nation’s
biggest newspaper merger as
falling stock prices put the
deal in jeopardy, The Post has
learned.
Cooperman, whose Omega
Advisors owns a 9.9 percent
stake in New Media Invest-
ment Group, is telling people
he will vote down New Me-
dia’s planned merger with
USA Today owner Gannett
Co. unless the stock reverses
its recent slide, sources said.
New Media, whose Gate-
house Media owns 152 re-
gional newspapers across the
country, announced on Aug. 5
that it would buy Gannett in a
cash-and-stock deal valued at
$1.4 billion.
The deal’s value has plum-
meted to $1.2 billion, however,
as investors flee New Media,
which will be used to buy
Gannett.
Cooperman, who began
buying New Media stock in
February when it was trading
at more than $13 a share,
thinks the deal will only work
if New Media’s shares rise
above $8 a share, sources said.
The stock, which has
dropped 25 percent since the
deal was unveiled last week,
closed down 2.4 percent Mon-
day, to $7.89 a share.Hedge fund Alden Capital,
headed by Heath Freeman,
came out against the deal on
Friday, when it announced a
9.4 percent stake.
Together, Cooperman and
Alden own nearly 20 percent
of New Media’s shares.Shareholders of both com-
panies need to OK the merger
for it to go through. They still
have time to turn things
around, however, as the vote is
expected to be held in Novem-
ber.
Cooperman’s waffling sup-port comes as New Media
Chairman and CEO Michael
Reed plans to hit the road
Tuesday with Gannett CEO
Paul Bascobert to sell the deal
to investors.
As The Post reported last
week, the execs aim to use theroadshow to convince inves-
tors that the merger is the best
way forward, including $300
million in savings.
Stock issues aside, the
Bronx-born Cooperman, 76,
has been a proponent of a
New Media/Gannett merger.
In fact, his Omega slightly
added to its stake on Aug. 5
and Aug. 7 in anticipation of
New Media becoming the na-
tion’s largest newspaper pub-
lisher, sources said.
Alden, which owns the Den-
ver Post and Boston Herald
through newspaper chain
MNG Enterprises, is opposing
the deal because it wants New
Media to merge with it in-
stead, a source with direct
knowledge of Alden’s think-
ing said.
Meanwhile, some Tribune
Publishing shareholders are
urging the board to consider
making a $10-a-share counter-
bid for Gannett. But that strat-
egy would require Tribune to
convince Gannett sharehold-
ers that they would be better
off taking a lower all-cash of-
fer from Tribune than the
cash-and-stock deal that New
Media is proposing, which
contains only $6.25 per share
in cash.
Gannett shares rose 6 cents
Monday, to close at $9.81.
New Media can break its
deal with Gannett for a rela-
tively low price, giving it the
ability to pursue other op-
tions, sources said.
New Media didn’t return a
call for comment.
[email protected]By SARAH KROUSEVerizon has agreed to sell its
blogging Web site Tumblr to the
owner of popular online-publishing
tool WordPress, unloading for a
nominal amount a site that once
fetched a purchase price of more
than $1 billion.
Automattic Inc. will buy Tumblr
for an undisclosed sum and take onabout 200 staffers, the companies
said. Tumblr is a free service that
hosts millions of blogs where users
can upload photos, music and art,
but it has been dwarfed by Face-
book, Reddit and other services.
Verizon became Tumblr’s owner
through the carrier’s 2017 acquisi-
tion of Yahoo as part of a bid to
build a digital media and advertis-
ing business. The wireless carrierbegan seeking a buyer for Tumblr
earlier this year, The Wall Street
Journal reported.
Yahoo had paid about $1.1 billion
for Tumblr in 2013 when it was one
of several fast-growing internet
start-ups.
Tumblr failed to generate mean-
ingful revenue for Yahoo, prompt-
ing the company to write down the
site’s value by $230 million in 2016.A decision last year by Verizon to
ban adult content on Tumblr alien-
ated some users.
Verizon is in the process of re-
vamping its media group, which
struggled to meet revenue targets
in recent years. The business, home
to legacy Yahoo, and AOL web
properties such as HuffPost, is in-
creasingly focused on subscription
and original content. Dow JonesStop the presses!
If New Media’s shares continue to trade under
$8 apiece, hedgieLeon Cooperman could advocate
this kind ofresponse to the pending, supersized
newspaper merger, sources said.LeonOmega
Advisors Inc.Verizon dumps $tumbling Tumblr site
MERGER MENACED
Big investor waffles on New Media-Gannett: sources
Post photo compositeBusiness
Refreshing Rx
Rite Aid on Monday
appointed Heyward
Donigan, 58, as CEO,
saying the former Sap-
phire Digital leader’s
health care experience
will help the pharmacy
chain confront competi-
tion that has hurt sales
and prompted job cuts.Merger foe
Oregon has joined a
multi-state lawsuit to
block a merger between
T-Mobile and Sprint,
which the 15 states ar-
gue is anti-competitive
and will cost residents
more than $4.5 billion
annually.Let’s remold
Och-Ziff Capital Man-
agement will change its
name to Sculptor Capital
Management in a re-
branding move that fol-
lows a few years of trou-
bles, including a $400
million fine to settle brib-
ery accusations related
to business in Africa.Hex to Brex
The US would enthu-
siastically support a no-
deal Brexit if that is
what the British govern-
ment decided to do, Na-
tional Security Adviser
John Bolton said during
a London visit aimed at
reassuring Britain over
UK-US ties.Smokin’ hot
Bryant Park Grill
owner Ark Restaurants
Corp. reported a fiscal
third-quarter profit of
$4 million — sending
shares up 3 percent, to
$19.84.Sources: AP, Dow Jones,
Reuters and Post wiresBUSINESS
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