The Dallas TV company just announced what had been expected: At a special meeting today, shareholders gave management the green light to proceed with a deal announced in June where Gannett will pay $1.5 billion in cash plus assume $715 million in debt to buy Belo's 20 stations.
The deal will make Gannett one of the nation's biggest TV station owners, adding to its status as the country's top newspaper publisher by revenue.
Under the deal, Gannett will take ownership of only 15 of the stations. The remaining five will be spun off to two newly created companies led by former TV executives. GCI will help with financing, and will provide some back office services for those two companies. new, third company led by former Belo executive Jack Sander. GCI has said it will provide some back office services for the Sander stations. And GCI will help the company, Sander Holdings Co., with financing needed to buy them. That's all to comply with federal regulations limiting how many TV and radio stations one company can own in any single market.
The boards of Belo and Gannett have already approved the deal. Today's vote was one of the last big hurdles for the companies to clear for the deal to be completed by the end of the year.
With the deal, Gannett's Broadcasting division will nearly double in size to 43 stations.
The boards of Belo and Gannett have already approved the deal. Today's vote was one of the last big hurdles for the companies to clear for the deal to be completed by the end of the year.
With the deal, Gannett's Broadcasting division will nearly double in size to 43 stations.
[Updated at 7:12 p.m. ET: Gannett's stock traded at a 52-week high after the news: $26.90. It closed at $26.67, up 92 cents, or 3.6%.]
Belo shares are down today while Gannett shares got a small bump up. Not a great deal for Belo share holders.
ReplyDelete1:39 Thanks for your financial wisdom Warren Buffett. Belo shares were already higher because of the purchase up 41% for the past 6 months.
ReplyDeleteStill there were analyst that think Belo was being undervalued and Gannett stock popped after they announced the deal. I am not Warren Buffett but apparently neither are you.
DeleteError -- Four stations go to Sander, one goes to Tucker.
ReplyDeleteThank you. That fifth station is in Tucson. Ben Tucker is a former Fisher Communications CEO.
DeleteCant wait for the cost saving synergies to kick in.
ReplyDelete