Good Wednesday Morning and it's choppy.
Daylight - As I was driving home from work yesterday evening, the song that popped up on Pandora was "Tuesday's Gone," and thankfully it's gone. It was a day of playbacks - in response to my Monday Morning Report on the Gannett bid for Tribune Publishing, the Tribune team spent a long time on the phone with me, telling me over and over how their Chairman Michael Ferro's only interest is whatever is best for shareholders and that nothing was personal between him and Gannett, as I had stated in the report.
Well, Ferro spent all day yesterday convincing not only me, but everyone that it is such a personal battle he is willing to gamble big time with shareholders' wealth on the line. He rejected Gannett's improved offer to buy the company and then tagged Patrick Soon-Shiong's deep pockets for a $70.5 million dollar investment. Ferro and team can argue this is all designed to draw a higher offer, but the Soon-Shiong investment is a poison pill meant to block the deal and could mean Tribune Publishing investors could be left flapping in the wind with a declining stock if Gannett walks from the table.
Here is the deal - Instead of engaging with Gannett over their latest $15 dollar per share offer, which valued the company at $864 million and a 100 percent premium in their stock since Gannett made the first offer, Ferro and board struck a side agreement with Soon-Shiong that pays him a 13 percent interest rate on the $70 million dollar investment. The cherry on top is a seat on the board as vice chairman.
Mr. Soon-Shiong is a major stakeholder in the Los Angeles Lakers, so he is used to being courtside for a big game. Also, yesterday Ferro asked Gannett, publisher of USA Today and 100 other media entities, to open its book for a two-way due diligence process. This shows all the cards in Ferro's hands face-up - it's deeply personal. Gannett is offering a straight cash deal. Dealb%k
Hot - Another Oldie, but Goldie - George Zimmer, founder of Men's Warehouse and cult-like Entrepreneur for selling his suit and ties on TV, wants the company back he co-founded in 1973. Zimmer is in talks with private-equity firms to try to win back control of Men's Wearhouse, now owned by parent Tailored Brands, who also acquired Jos A Banks against the outrage of Zimmer. Subsequently, George and the board had an ugly divorce that was one of the first founder-and-company breakups played out in social media.
Since George left, the company has lost two-thirds of its value, so he sees a good buy. Plus I am sure he's totally bored, as he had planned to stay on with the company after the sale. Can anyone see Zimmer doing anything else, but selling more suits? He was a scrappy retailer that not only survived, but thrived in every economic cycle. As far as getting his company back, I wouldn't bet against George, but I wouldn't guarantee it. It's like coming back after a divorce and asking for your house back. Good luck with that. Fortune
M&A - The Two-Headed Monster - Monsanto rejected Bayer's $62 billion takeover offer on Tuesday, calling the takeover approach by the German giant too low. But Monsanto, the top producer of genetically modified crop seeds, said with a big smile it was "open to continued and constructive conversations" about a potential merger of the two. Dealb%k
Live Rounds - I also heard both from the Macy's folks and friends on my report last week that their CFO said he was scratching his head over their drop in sales. From the best I can tell, Macy's is considering a new strategy of opening a discount store within the store. Yes, it would be two stores, full retail and discount retail, under the Macy's roof.
I suggested Macy's call Delta and ask about its endeavor to have a discount airline called Song within its full-service airline. Surprisingly, this airline idea was the outcome of Delta's year long engagement with McKinsey Consulting. It's a crazy idea. Drop it and auction off a 10-year license for naming rights to the Thanksgiving Day Parade agreement among Amazon, Google and Apple.
Exits - Honest Dollar, an Austin, Texas-based online retirement savings platforms that raised $3 million in VC funding, has sold to Goldman Sachs, via its investment management unit. Fortune Term Sheet
Venture Capital - Uber rival, Gett Inc., receives $300 million in funding from Volkswagen AG. The taxi-hailing application has been offering rides for as little as $1. Volkswagen AG hopes this investment will help them move forward from the diesel-engine scandal that rocked them last year. CNN
San Francisco-based Clover Health raised $165 million in Series E funding from Greenoaks Capital.
Wealth management robotics company, SigFig, raised $33 million from the likes of New York Life and UBS as well as securing a $7 million dollar loan from Comerica Bank.
NuTomy, a Cambridge, Mass.-based MIT spinout focused on self-driving taxis, has raised $16 million in Series A funding.
Konfio, an online Mexican lending platform, has raised $8 million in new VC funding. Fortune Term Sheet
Private Equity - eBay has acquired Spanish ticket marketplace Ticketbis, which will be rolled into eBay's StubHub platform. Stubhub is said to be valued at around $165 million.
Atlanta-based, MSouth Equity Partners acquired Southern Air & Heat Holdings from Pulte Capital Partners. Fortune Term Sheet
IPO - No IPO news this morning.
Spotlight - One of the hardest things to do as an Entrepreneur is have two big winners back to back. Well, Mike Dendy has done it with AMPS, Advance Medical Pricing Solutions - another win in healthcare. It's not opinion - it's his numbers, as he blew past $15 million in revenue with strong earnings, cash flow and growth month-over-month. He is doing what everyone else is talking about - reducing the cost of healthcare by breaking up the OPEC of health care - hospitals and insurance companies. Impressive.
And that's what's ahead, Cliff
