-- Belo Corp. CEO Dunia Shive, in today's press release about the Dallas TV company selling itself to GCI for $1.5 billion in cash, plus the assumption of $715 million in debt. Shive and her fellow officers and directors own 42% of the voting power of Belo shares. If the combined companies' prospects are so rosy, will Shive & Co. take the cash they get for their shares and reinvest a significant amount in GCI stock?
I had the same reaction when Tumblr's owners agreed last month to sell to Yahoo for $1.1 billion in cash.
ReplyDeleteUh, no. They are cashing out of the industry. Good for them.
ReplyDeleteMy guess is that Shive and some combination of Belo officers, perhaps with private equity backing, will end up owning the 5 stations not moving into Gannett. The new company will then outsource certain functions to Gannett per the "shared services agreement" mentioned in the employee FAQ.
ReplyDeleteI wondered if something like that might be in the works. These 20 stations are selling for an average $110 million each, including the debt. Using that as a rough yardstick, Shive & Co. would need more than $500 million in financing.
DeleteThe employee FAQ says they will be "restructuring ownership" and they will be "separately owned." It will be interesting to see how they do it and what, if any, pushback the FCC has on the deal.
DeleteBelo didn't have the size and financing to compete, to get larger. This was their best option. Looks like everyone wins for a change.
ReplyDeleteThanks for checking in Dave.
DeleteJack Sander in Phoenix will run the other stations, but GCI will help set up financing.
ReplyDeletePartner? It is very foolish to think of Gannett as a partner. Belo was purchased by Gannett, Gannett has attained all 5 of Belo properties, it is not a partnership, Gannett is the new owner.
ReplyDelete