The media business that owns USA Today has fired back against its potential hedge fund buyer. 

In a statement Monday, Gannett Co. said it was “setting the record straight” on what it described as “false and misleading statements” made by MNG Enterprises, the media business owned by hedge fund Alden Global. 

MNG, formerly known as Digital First Media Group, had made an unexpected takeover offer for Gannett in January — an offer which Gannett declined three weeks later. The offer of $12 per share had amounted to roughly $1.37 billion, or a 41 percent premium to Gannett’s stock market valuation at the end of December, according to MNG. Gannett’s stock closed Monday at $9.61 per share.

MNG has continued to pursue the acquisition despite Gannett’s rejection, and has since nominated a slate of directors to take over Gannett’s board. The two companies have been trading jabs back and forth in the lead up to Gannett’s May 16 shareholder meeting, with MNG sharing a presentation on April 11 and Gannett responding with Monday’s fact sheet.

In the fact sheet, Gannett took issue with several of MNG’s business practices, including claiming that MNG has not secured the financing necessary to acquire Gannett. MNG, for its part, had defended its ability to finance the deal in its April 11 presentation, which cited a letter from Oaktree Capital Management. According to MNG, the letter stated that Oaktree is “highly confident” in MNG’s ability to obtain debt financing worth at least $1.72 billion.

A spokesperson for MNG and a spokesperson for Oaktree each declined to share the letter with Institutional Investor.

Gannett argued that the combined leverage profile of MNG and Gannett, should the acquisition go through, would “represent true ‘capital structure risk,’” noting that Gannett’s current balance sheet is “conservative relative to peers.”

If MNG is able to install its board at the newspaper company, Gannett warned that MNG would initiate a strategic review that could lead to the companies being combined in a different way.

“One possible outcome is Gannett being forced to acquire MNG, as MNG has previously proposed,” the fact sheet stated.

In addition, Gannett said MNG may “siphon Gannett assets (including potentially from Gannett’s pensions) to fund unrelated investments and deliver generous management fees to Alden Global Capital (MNG’s majority shareholder), while destroying value for other Gannett shareholders.”

Gannett’s concerns are not entirely unfounded. MNG had previously been criticized for acquiring newspapers, cutting costs, and then quickly selling them. In a February 21 letter to Alden Global president Heath Freeman, Senator Chuck Schumer pointed out that Alden Global and MNG have cut more than 1,000 jobs at local newspapers like the Denver Post, The Delaware County Times, and The San Jose Mercury News.

[II Deep Dive: When Hedge Funds Try Journalism] 

Meanwhile, the Washington Post has reported last week that the Department of Labor is investigating Alden Global for allegedly moving $250 million of employee pension savings into its own accounts, effectively taking over the management of some employees’ retirement funds.

MNG’s spokesperson confirmed the existence of the investigation to Institutional Investor on Monday but declined to comment on what stage the investigation is in. According to the spokesperson, Alden had managed a portion of MNG’s pension plan assets without charging performance or management fees.

In 2017, Alden began winding down the management of these assets, the spokesperson said, and the hedge fund now manages less than 0.5 percent of the assets in MNG’s sponsored single-employer defined benefit plans. 

“MNG believes that Alden’s management of the pension plan assets for which it provided management services has at all times complied with all legal requirements, including ERISA,” the spokesperson said.  

If MNG were to acquire Gannett, it would not manage any of the newspaper company’s pension plan assets, the spokesperson said.