Gannett, the publisher of the daily, USA Today, is dropping its takeover bid for Tronc, the owner of the Chicago Tribune and Los Angeles Times.
Gannett - the biggest U.S. newspaper publisher by circulation - first made an offer of $12.25 per share in April for the company formerly known as Tribune Publishing. It raised the offer to $15 per share a month later, but that was also rejected.
In a statement released Tuesday morning, Gannett said that the acquisition was an attractive opportunity but called the terms "not acceptable." Tronc said the deal fell apart because Gannett could not line up financing.
Tronc shares plunged on the news.
Jessica Toonkel covers the story for Reuters.
(SOUNDBITE) JESSICA TOONKEL, ADVERTISING AND MEDIA REPORTER, REUTERS, (ENGLISH) SAYING:
"Our sources say two things happened. One was, Tronc was adding on some additions to the deal that would have made the deal more expensive for gannett to do. Things like adding stock for directors on the board. That was one element. The other things wa, two of the banks in financing the deal backed away after they saw Gannett earnings."
The news comes as the newspaper industry is trying to consolidate. It's battling declining circulation, rising costs, shrinking advertising revenue, and a shift to digital content.