Actually, Gannett is in a governance war with a hedge fund that owns a rival newspaper chain right now, not with Kimco. Knowing that MNG has a well-earned reputation for slashing newsroom costs and diminishing the quality of the publications it owns, I voted against the proposed takeover, even though it proposed to pay a premium of more than 20% above Gannett’s most recent share price. (I’m still a newspaperman at heart, having spent decades as a reporter and editor, mostly for trade publications covering the financial services industry.)
So I voted with my heart, but I think my head is playing for the same team on this one. Gannett’s dividend — which I hope is sustainable — currently exceeds a 6% annual payout rate, and that persuaded me to up my stake a bit this week, taking advantage of Tuesday’s widespread sell off to buy on the dip. In the end, I’m not sure the MNG bid for Gannett is real. There’s been some speculation that the newspaper chain’s hedge fund owners hoped the bid would spark Gannett to counter with a bid of its own to buy the MNG newspaper chain. It will interesting to see how shareholders vote — both sides have been lobbying hard to influence the upcoming board election.
Proxy advisory firm Glass-Lewis had this to say about the proposed merger, via Gannett’s website:
“MNG appears to have conflicting priorities and its behavior both before and after submitting its bid suggests that MNG does not have a sincere interest in acquiring the Company, despite many statements to that specific intent.”
I’m betting that Gannett remains independent, and I wouldn’t be surprised if that’s good for shareholder value in the long run.
Kimco, on the other hand, still looks attractive to me as well. And while shares rose in the wake of its recent earnings report, the current price remains an attractive entry point. Psychologically, I guess I wanted to see a bigger dip in the share price before buying. But Kimco is still high up on the list of company’s I’d like to add to my portfolio.
Dividend Pick of the Week 