Billionaire Mario Gabelli‘s GAMCO Investors has recently filed a 13D with the US Securities and Exchange Commission, in which it reported its stake in Journal Media Group Inc (NYSE:JMG). The filing showed that GAMCO and its affiliates own a total of 4.40 million shares of the company, the stake amassing slightly over 18% of Journal Media’s outstanding common stock. GAMCO itself holds 1.39 million shares out of the aggregate amount, which compares to 1.30 million shares it disclosed in its latest 13F filing.
Given that the stake is activist by nature, GAMCO added in the filing:
“GAMCO reiterates its position that the Issuer’s merger with GCI does not adequately compensate Issuer’s shareholders for the substantial real estate holdings of the Issuer. GAMCO suggested via Twitter (attached as Exhibit A) that the settlement announced on February 16, 2016 by the Issuer in an 8-K was cosmetic varnish that Delaware Courts would not approve unless meaningful disclosure was made to shareholders.
GAMCO has made multiple public filings requesting detailed information about the valuation of real estate assets and has been stonewalled. GAMCO claims that other than one piece of real estate that is not core to Journal’s business, Methuselah Advisors, the financial advisor giving a fairness opinion to Journal’s Board, relied on JMG’s own valuation for real estate. Gannett has gone so far as to issue a letter rebuking GAMCO for requesting this information, claiming it was misleading. GAMCO, as recently as last week, filed a 13D claiming that the Issuer’s refusal to disclose its real estate asset valuations, beyond the $5.4 million “excess real estate value” for real estate not used in core operations is misleading to shareholders. Gannett’s claim is essentially suggesting that investors are not sophisticated enough to be given basic fundamental information about the value of the company’s real estate. However the relevance of the real estate valuations is underscored by the McClatchy Company’s announcement on February 11, 2016 that it had contributed company-owned real estate to its qualified defined pension plan at a value derived from an independent appraisal. McClatchy plans to lease back the facilities for the foreseeable future while receiving an immediate cash tax benefit.
Given the backdrop of these events, the Issuer’s 8-K filed February 16, 2016 announcing the settlement of the purported class action lawsuit for additional disclosure did not include additional real estate valuations. Without admitting the disclosures were inadequate, JMG agreed to revise their outstanding disclosure documents and pay some soon to be disclosed amount to the plaintiff’s lawyers. The disclosure adjustments did not include additional details on the real estate valuations – arguably the only additional disclosure relevant shareholders have been asking for. The Delaware Courts have recently taken these types of settlements to task and denied plaintiff’s attorney fees for adding what the Court recognized as no benefit to shareholders.”
You can access the original SEC filing by clicking here.
Ownership Summary Table
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| Gabelli Funds | 2,387,189 | 2,387,189 | 2,387,189 | 9.78% | ||
| GAMCO Asset Management Inc. I.D. No. 13-40445 | 1,315,067 | 1,393,100 | 1,393,100 | 5.71% | ||
| Gabelli Securities, Inc. I.D. No. 13-3379374 | 262,833 | 262,833 | 262,833 | 1.08% | ||
| Gabelli Foundation, Inc. I.D. No. 94 | 6,000 | 6,000 | 6,000 | 0.02% | ||
| Teton Advisors, Inc. I.D. No. 13-4008049 | 352,367 | 352,367 | 352,367 | 1.44% | ||
| GGCP, Inc. I.D. No. 13-3056041 | 0.00% | |||||
| GAMCO Investors, Inc. I.D. No. 13-400786 | 0.00% | |||||
| Associated Capital Group, Inc. I.D. No. 47-3965991 Check the appropriate box if a member of a group (SEE INSTRUCTIONS) (a) (b) | 585 | 585 | 585 | 0.00% | ||
| Mario J. Gabelli | 0.00% |
