[Screenshot of homepage shows Post Co. CEO Donald Graham]
The Washington Post Co. has agreed to sell its flagship newspaper to Amazon founder and chief executive Jeff Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations, the company said in a surprise announcement this afternoon.
The deal, coming on the heels of Saturday's fire sale of The Boston Globe to another wealthy individual, is the latest evidence the market for newspapers is heating up after years of plummeting revenue.
Bezos, 49, is paying $250 million in cash, and is investing on his own; Amazon is not a part of the acquisition. His purchase will likely renew interest in other newspapers -- including the spinoff or sale of Gannett's 100-plus U.S. and U.K. newspapers, plus USA Today.
"We always, at the board level, are looking every time we meet and in between meetings, we are looking at opportunities to increase shareholder value. We never rule anything out, but our focus right now is a transaction that has created a lot of value for the company and will create even more into the future. So we're focused on that in the short term, to have a successful integration."
Still, Martore was similarly noncommittal when she was asked about the possibility of TV deals three months before. Unbeknownst to analysts, however, she was already just four days away from making an offer to Belo of $2.2 billion in cash and assumption of debt.
Post investors snapped to the news. In after-hours trading, WPO's stock jumped $28.30, or 5%, to $597 a share. In the regular session, it closed at $568.70, up 1.6%. GCI's shares were flat in late trading after closing at $25.81, down 1.8%.
Amazon shares closed at $300.99, down 1.1%. They were unchanged after hours.
How deal came down
Early this year, Washington Post Co. CEO Donald Graham brought in investment bank Allen & Co. to begin looking for someone to buy the paper, The Wall Street Journal says in a report about today's deal.
Graham personally reached out to Bezos early, according to a person with direct knowledge of the deal cited by the WSJ. "Initially, Bezos held back, citing a lack of time to properly deal with a transaction," according to the WSJ. Then, in July, Bezos wrote an e-mail to Graham saying, "If you're interested, I am."
Bezos, who launched Amazon in 1995, is worth about $26 billion via his stake in the e-commerce giant. As part of a planned stock sale, he took in $185 million this month, representing less than 1% of his holdings. Forbes ranked him as the 19th most-wealthy man in the world, just ahead of Google's Larry Page.
Related: Graham family's fourth generation takes charge.