Gannett, the publisher of USA Today, raised its all-cash offer to buy Tribune Publishing Co to $15 per share from $12.25, valuing the publisher of the Chicago Tribune and the Los Angeles Times at about $864 million.
Tribune's shares were trading at $14.05 before the opening bell on Monday, well below the offer price. The latest offer is a premium of 31 percent to Tribune's Friday close.
Tribune's board adopted a shareholder rights plan - popularly known as a "poison pill" - earlier this month in an attempt to thwart Gannett's unsolicited takeover offer.
Gannett said the latest bid follows an analysis of Tribune's debt and pension liabilities, which were reported earlier this month.
"In addition, after further review, Gannett has greater confidence in its ability to yield additional operational improvements in this transaction," Gannett said in a statement.
The offer comes amid declining circulation, rising costs and falling advertising sales in the newspaper industry that have pushed publishers to consolidate and find new areas of growth.
Gannett shares were little changed in premarket trading.
(Reporting by Narottam Medhora in Bengaluru; Editing by Anil D'Silva)