By Chelsey Dulaney
Gannett Co. has agreed to implement certain corporate-governance
policies at the upcoming spinoff of its publishing division,
settling a dispute with activist investor Carl Icahn.
In January, Icahn began pushing for two seats on Gannett's board
and changes to its corporate-governance rules ahead of the planned
spinoff of its publishing division from its broadcast business.
As part of the new corporate-governance policies, Gannett said
it will allow special meetings to be called by shareholders with
20% stakes. The company also said that if it adopts a
shareholder-rights plan, it will expire after 135 days unless
extended by a majority of shareholders.
Mr. Icahn, with a roughly 6.6% stake in Gannett, has agreed to
withdraw the board candidates he had planned to nominate at
Gannett's annual meeting.
The settlement mirrors those Mr. Icahn has struck recently with
eBay Inc., which agreed to strip from PayPal's bylaws many of the
protections companies often have in place to prevent hostile
takeovers, and Manitowoc Co., which agreed to certain limits on
shareholder-rights plans ahead of the planned split-up of its
business.
The moves effectively ensure that the companies will entertain
takeover offers and bucks a trend that has seen corporate parents,
mindful of the threats facing brand-new companies, load up their
spinoffs with tight defenses.
In the January letter to Gannett Chief Executive Gracia Martore,
Mr. Icahn said he was dissatisfied with the company's governance
profile and accused it of poor communication.
Mr. Icahn suggested that after the spinoff the two companies
would find themselves becoming takeover targets, and worried that
their boards would make protective moves that wouldn't be in the
best interest of shareholders.
Mr. Icahn said he would press for corporate-governance changes,
including blocking any so-called poison-pill provision designed to
prevent a takeover, without majority approval by all of the
shareholders.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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