Gannett to Buy Belo for $1.5 Billion, Creating Fourth-Largest Station Group

Jun 13, 2013  •  Post A Comment

Gannett Co. has announced that it will buy station owner Belo Corp. for $1.5 billion, a move that would create the fourth-largest owner of major network affiliates in the U.S., Reuters reports.

The buyout would provide faster-growing TV assets for Gannett, helping to offset the company’s newspaper businesses, the piece notes. Gannett is the largest U.S. newspaper chain.

The deal would almost double Gannett’s broadcast holdings, creating a portfolio of network affiliates reaching almost one-third of the U.S. market, Gannett said today.

“Gannett’s $13.75-per-share offer represents a 28 percent premium to Belo’s close on Wednesday. Shares in both companies soared in early trading, with Gannett hitting a five-year high,” Reuters reports. “If the transaction is approved, Gannett’s broadcast segment would contribute more than half of the company’s pro-forma earnings before interest, tax, depreciation and amortization.”

Gannett CEO Gracia Martore said the buyout would give Gannett a "more favorable balance," with more emphasis on higher-growth assets. She added: "I think what we have is tremendous financial flexibility. We have a balance sheet that is actually even financially stronger today."

The report adds: “Gannett said it would generate significant free cash flow and increase its operating earnings per share by about 50 cents in the first year. It will also result in some $175 million of annual savings within three years after closing.”

Belo owns 20 TV stations, including nine in the top 25 markets, the piece notes.

The report adds: “The deal, which is expected to close by the end of this year, will need antitrust approval, Federal Communications Commission (FCC) approval, and approval by holders of two-thirds of Belo shares, Gannett said.”

One Comment

  1. I would rather see Gannett spinning off KMSB/KTTU, KMOV, and WHAS to Meredith, and KTVK to Scrips and combined the operations with KNXV with ABC moving to KTVK and KNXV becomes independent while KPNX is combined with KSAW. LIN could buy WSET and WCIV from Allbritton and KSTU, KDVR and turned into a CW station with KWGN getting FOX, WDAF, KTVI and turned into a ABC station with KPLR getting FOX and KDNL getting CW, WITI with the option of also acquiring WIWN from Pappas if they would want to fully sale the station in the future, WJW, WHNT, WGHP and turned into a ABC station with WXLV getting FOX, and maybe WNEP from Local TV LLC, while Meredith could buy KWGN and KPLR if Tribune would ever sale various stations to help pay off it’s debt from their 2008 bankruptcy and buy KFOR/KAUT, KFSM/KXNW, WHO, WQAD, WREG, WTVR, and WTKR/WGNT from Local TV LLC. I would allow FOX to buy KPLR and KWGN from Tribune if I still want Meredith to buy KMSB/KTTU, KMOV, and WHAS from Belo.

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