MNG Enterprises Inc., parent of Digital First Media, continues its takeover attempt of Gannett, the owner of more than 100 media properties and related businesses, including USA Today, Detroit Free Press, AZCentral, IndyStar and ReachLocal. USA Today reports that MNG has mailed proxies to shareholders, asking for them to support MNGs six nominees to Gannetts board of directors.

This is MNGs latest attempt to acquire Gannett, after the company rejected its unsolicited proposal to buy Gannett for $12 per share. Gannett rejected the proposal because it undervalues Gannett, the proposal is not credible, and Gannett believes MNG lacks the proper funding to acquire the company. Gannett also says the takeover is not in the best interest of its shareholders.

Our board of directors is confident that Gannett has significant value creation potential. Our vision and pursuit of our digital transformation, combined with our USA TODAY NETWORK strategy, enables us to serve more directly and efficiently the persistent demand of our audiences and customers to engage with their communities, said J. Jeffry Louis, chairman of Gannetts board, in a February 4 news release.

News of the MNG mailings to Gannett shareholders comes about a week after Gannett disclosed in its annual filing to the Securities and Exchange Commission that, since 2015, MNG has repeatedly asked Gannett to acquire MNG. The conversations were casual and private, and no formal discussions were held. MNG says it had discussed a potential strategic combination, but there was no discussion of an acquisition, reports USA Today.

On Monday, Gannett announced its own letter to shareholders which outlines its digital strategy and urges them to vote to retain the current experienced, independent director nominees. Gannett also reaffirms its belief that MNGs conduct is questionable, and it considers the actions of MNG and owner hedge fund Alden Global Capital to be self-dealing.

Here is an excerpt from that letter:

Your board of directors has been a responsible steward of your investment in Gannett and is overseeing a multi-year digital transformation that, combined with the companys USA TODAY NETWORK strategy, will enable the company to continue to serve as a trusted, comprehensive digital marketing partner to local and national businesses while also strengthening and growing our communities through digital engagement. This strategy is driving results that are delivering growth and enhancing shareholder value in a challenging industry environment. Since becoming a standalone company in mid-2015, Gannett has returned more than $324 million of capital to shareholders – delivering a higher and more stable total shareholder return than the majority of the companys peers, says the letter.

Gannett says its current directors are actively engaged, highly experienced and independent, while MNGs candidates are clearly conflicted and have a self-serving agenda to take control of Gannett. Gannett urges shareholders to protect their investment by retaining the existing board of directors and ignoring the blue proxy cards sent to them by MNG.

Gannett shared its digital strategy in providing shareholders with value. Here are highlights:

– Leverage local and national presence and scale to expand and deepen relationships with consumers and businesses

– Accelerate organic digital revenue growth through new marketing and advertising solutions and providing innovative customer experiences

– Pursue accretive growth through select acquisitions that will offer synergy

– Align costs with legacy print business, thoughtfully and strategically

Gannett also shared some of its business highlights and awards won, in an effort to ensure shareholders their investments are well placed. The company also outlined its serious concerns over MNG and Alden’s intentions.

“MNG has a record of value destruction and diverting assets, including employee pension funds, to enrich Alden,” said Gannett. “…Given MNG’s and Alden’s history and conduct, how can MNG’s candidates, all of whom are affiliated with MNG and/or Alden, be trusted to fulfill their fiduciary duty to Gannett shareholders?”

Insider Take:

Just when we thought it couldn’t get any uglier, it does. Gannett and MNG are both pulling out all the stops to make sure their side is heard. We aren’t going to speculate who will emerge victorious, but any takeover or merger at this point is unlikely to be harmonious at any level. If MNG wins, they are likely to gut Gannett as they have other newspapers they’ve taken over like the Denver Post. If Gannett comes out unscathed, they are likely to strengthen their position and to make strategic acquisitions of their own to ensure another run at the company is unsuccessful.