By Subrat Patnaik
(Reuters) - Activist investor Carl Icahn nominated two directors to USA Today publisher Gannett Co Inc's (N:GCI) board and pushed for changes in the company's corporate governance practices.
Gannett's shares rose as much as 3.9 percent to $32.58 on the New York Stock Exchange.
Gannett said in August it would separate its slow-growing print operations, including USA Today, from its TV and digital properties.
Icahn, who owned about 6.6 percent of Gannett as of Sept. 30, said he was concerned about the decisions the company may make in anticipation of the spinoff.
The billionaire investor, however, said following the spinoff either of the two companies could become potential acquisition targets.
The print group, which will retain the Gannett name, includes 81 local newspapers in the United States and the British newspaper arm Newsquest, while the digital business will consist of its 46 TV stations and websites such as Cars.com and CareerBuilder.
Icahn first disclosed a 6.6 percent stake in Gannett on Aug. 14, days after the company announced the spinoff. He had said at the time that splitting the media company could create value, calling its shares "undervalued".
Since the announcement the company's stock has fallen about 8 percent through Wednesday's close.
Icahn on Thursday attributed the decline to the company's failure to "adequately explain to investors the capital structure, debt capacity and business strategy for each of the post-spin companies."
Icahn also said the company should put in place a provision that prevents the board from adopting a poison pill without the approval of a majority of the shareholders.
The company said in a statement it was surprised with Icahn's "aggressive actions", adding that it would evaluate the proposals and make a recommendation to shareholders in due course.
Tony Scherrer, director of research at Smead Capital Managament, which owns a 1.05 percent stake in Gannett, said the company's management had already been pursuing what Icahn originally wanted.
"He (Icahn) is coming after us with some bravado and campaigning to get more blood out of the turnip," he said.
Gannett's shares pared most of the early gains and were trading up less than 1 percent at $31.55 on Thursday afternoon.
(This version corrects to "turnip" from "turn-up" in thirteenth paragraph)