Tribune Publishing shares plunged Monday after the Los Angeles Times owner rejected a second takeover bid from USA Today owner Gannett, and said a billionaire entrepreneur would take a $70 million stake in the company.
Last week, Gannett raised its per-share takeover bid to $15 from $12.25, in an offer that was worth about $864 million including debt.
Tribune said Gannett's latest offer was not in the best interest of shareholders, but did agree to share confidential corporate information with Gannett, providing a possible path forward.
Shares of Tribune fell 15 percent Monday to $12.09. Gannett shares fell 2.4 percent to $15.74.
In a statement, Gannett said it would consider whether to proceed with the offer, and the non-disclosure agreement "would require require Gannett to effectively cease any public proxy solicitation or other public pursuit of a transaction."
Separately, Tribune said billionaire Patrick Soon-Shiong invested $70.5 million in the company, in exchange for 4.7 million shares of Tribune stock at $15 a share - the same price Gannett proposed in its raised bid.
Through his fund Nant Capital LLC, Soon-Shiong will hold about 13 percent in Tribune and join the publisher's board as vice chairman on June 2. He will also be Tribune's second largest shareholder.
Tribune stock is up 31 percent year-to-date.