Carl Icahn disclosed Thursday that he planned to seek nominations of two directors in addition to offering some precatory proposals that would require certain corporate governance changes at Gannett Co. Inc. The media company responded that its board will evaluate the activist investor’s submission and make a suitable recommendation to its shareholders in due course.

Carl Icahn seeks two board seats

In his amended 13D filing with the Securities and Exchange Commission, Icahn disclosed his nominations of two candidates for election to Gannett’s board of directors at the company’s 2015 annual shareholders’ meeting. His latest filing also revealed the submission of precatory proposals that would require certain corporate governance provisions at Gannett and at the new publishing company that will be formed upon completion of the media company’s planned separation later this year.

Carl Icahn Icahn Enterprises
Carl Icahn image via FBN

As reported by ValueWalk, by exercising his call option, Carl Icahn now owns 14.97 million shares of Gannett, translating to a 6.63% stake in the newspaper company. Gannett currently runs a number of news and marketing companies covering a broad spectrum. The company owns USA Today, Newsquest, BLiNQ Media and 23 local television stations. Gannett Company Inc. is joining a flood of media companies that have separated their broadcasting businesses from their publishing businesses.

Gannett could dissuade would-be suitors

In his amended 13D filing, Icahn indicated that many investors expect potential buyers to make offers to buy either of the newly separated businesses. He expressed worry that the media company would adopt corporate governance measures that could dissuade would-be suitors. Icahn indicated that to lower those defenses, he plans to propose several changes to Gannett’s current rules, including adoption of a shareholder rights plan – commonly called a “poison pill” – without the consent of a majority of shareholders and allowing special investor meetings, so long as 10% of stockholders agree to them.

The activist investor also disclosed that he planned to nominate Michael Dornemann, a former chairman of Bertelsmann Entertainment, and Courtney Mather, an Icahn employee who previously worked at Goldman Sachs.

Expressing surprise at Icahn’s latest proposal, Gannett non-executive Chairman Marge Magner said: “We are surprised by Mr. Icahn’s aggressive actions, including his threat to run a proxy contest to force wholesale changes in Gannett’s corporate governance and dictate the corporate governance of a company whose governance profile has yet to be determined.”

Rejecting the activist investor’s overreaching campaign, Magner said: “As we execute on the separation of our publishing business this year, shareholder interests will remain our priority.”