New York CNN  — 

Under the cloud of an aggressive takeover bid, Gannett reported a dip in fourth quarter revenue Wednesday. But the company said it was encouraged by growth in digital advertising.

Gannett, which publishes USA Today and is the nation’s largest newspaper chain, said its operating revenue for the final three months of 2018 totaled $751.4 million. That’s a drop from $854.2 million a year earlier.

Like many newspaper companies, Gannett (GCI) has battled a steady decline from print revenue, and those losses are often accompanied by steep cutbacks. The company endured layoffs at papers across the country last month during a bleak period that saw the media industry shed about 1,000 jobs at multiple outlets.

Gannett stock dropped about 3% during morning trading hours Wednesday.

But Robert Dickey, the president and CEO of Gannett who intends to step down later this year, said the company was “pleased” by growth in digital advertising, which he said was driven by “strong national advertising” across the company’s network of newspapers.

Gannett said Wednesday that its total digital revenue for the fourth quarter was $272.3 million, comprising 36% of its overall sales. The number of digital-only subscribers jumped to 504,000, a 46.3% spike from a year earlier.

That didn’t impress MNG Enterprises, the hedge fund-owned company that has been trying to mount an unsolicited takeover of Gannett since January 14.

In a statement Wednesday, MNG said that “Gannett’s disappointing year-end earnings and guidance underscore MNG’s concerns about the health and direction of the business.”

“Gannett has lost two-thirds of its free cash flow since 2014 and now forecasts continuing declines in their adjusted EBITDA for 2019,” the statement said. “Despite touting revenue gains in its digital assets, Gannett only partially disclosed the profitability of those assets and reaffirmed its interest in making additional digital acquisitions. It’s hard to fathom how the Gannett Board can continue to reject a premium, cash acquisition proposal when further declines and value destruction are on the horizon.”

Gannett has resisted the move, calling MNG’s $12-a-share offer not “credible.” Meanwhile, journalists at Gannett-owned publications have fretted the potential takeover.

MNG, which is also known as Digital First Media and is mostly owned by the New York hedge fund Alden Capital, has earned a reputation as a cutthroat newspaper owner. And the company has been aggressive in its pursuit of Gannett, of which MNG is already a minority shareholder.

MNG has been highly critical of Gannett’s leadership and overall strategy. In its January 14 offer letter, MNG called out Gannett for a “series of value-destroying decisions made by an unfocused leadership team.” In addition, MNG called for a moratorium on Gannett’s digital investments.

In recent years, Gannett has looked to expand its digital footprint as a way to supplement its traditional print offerings. The Wall Street Journal reported last month that Gannett had been eying an acquisition of Gizmodo Media Group, the publisher of websites like Deadspin and Jezebel.

On Wednesday, in advance of Gannett’s earnings report, MNG ratcheted up the pressure even more, launching a website: www.SaveGannett.com.

MNG urged Gannett shareholders to “demand answers to the still unanswered questions” about the company’s recent actions and its path forward.

Among MNG’s suggested questions to shareholders: “Why did you reject MNG’s offer and deny their request to extend the director nomination deadline before even meeting with MNG, rather than engaging in good faith to satisfy your fiduciary duties to shareholders?”

In a statement of its own on Wednesday, Gannett dismissed that criticism as “just another attempt by MNG to distract attention from the fact that its unsolicited proposal to acquire Gannett is not credible.”

“The Gannett board of directors is confident that Gannett has significant value creation potential in continuing to execute the company’s digital transformation and USA TODAY NETWORK strategy,” the statement said. “Given Gannett’s operational expertise, our focus on evolving our business model, and our unwavering commitment to remaining a trusted source of news, Gannett is well positioned to grow the company and its valuable assets to the benefit of Gannett shareholders and the communities we serve.”

Dickey preempted any such scrutiny at the top of a call with analysts Wednesday. He said that at a February 7 meeting between the two sides, MNG “once again failed to provide substantive answers to basic questions about its ability to finance and close its proposed transaction.”

Dickey said he wouldn’t comment beyond that. But he did use much of his time to trumpet Gannett’s digital advancements —perhaps a subtle rebuke to MNG’s admonition to end its investments in that area.

Dickey assured those on the call that Gannett would be “disciplined in our use of capital.” But he also pledged to continue the company’s “digital transformation.”