Heath Freeman, the boss of private equity firm Alden Global Capital, is throwing a wrench into the mega-merger between Gatehouse Media and USA Today owner Gannett.
In a bombshell disclosure Friday, it was revealed that MNG Enterprises, the newspaper group Alden controls, snapped up 9.4 percent of the stock of New Media Investment Group, which is poised to acquire Gannett. Shareholders can vote on the merger.
The SEC filing said MNG may vote down or campaign against the plans to create the largest newspaper publisher in the country. New Media’s Gatehouse Media is the nation’s second-largest newspaper owner behind Gannett.
And more trouble is brewing. One well-placed source told The Post that Tribune Publishing is also considering entering the fray with a $10-a-share cash bid for Gannett. Tribune would do it only if Gannett’s stock stays under $10 a share, where it has fallen this week on the merger news.
Freeman’s potential opposition to the deal is ironic considering that his MNG Enterprises was thwarted in its hostile bid for Gannett earlier this year — in part because shareholders were skeptical of Alden’s ability to finance the deal.
Alden has also been branded a destroyer of local papers because of the deep cuts it made in papers from the Denver Post to the Boston Herald.
Michael Kupinski, an analyst at Noble Financial, was skeptical of MNG’s motives, saying it may just be a gambit to entice New Media into making a bid for MNG.
“It sounds like he [Freeman] is looking for an exit strategy out of their own MNG group,” Kupinski said.
The New Media/Gannett deal has been troubled almost from the moment New Media unveiled its $1.4 billion cash-and-stock deal for Gannett on Monday.
Shares of both immediately tumbled — and then kept on going.
New Media’s stock staged a one-day rally on Thursday after The Post revealed that New Media Chairman and CEO Michael Reed was going to hit the road next week with Gannett executives to sell the deal to investors and keep them from selling off their stock.
The selling resumed on Friday with Gannett down 6.2 percent to close at $9.75 — a 7.5 percent decline this week. New Media fell 8.3 percent to close at $8.08 — a 24 percent drop since Monday.
Reed has been trying to quell investors’ concerns by promising savings of up to $300 million — of no solace to employees.
“The only way they can get to $300 million is to fire 1,500 to 2,000 people,” said one knowledgeable source.
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