MCLEAN, VA (Kim Hjelmgaard, USA Today & WZZM) - Gannett Co., the global media company that owns USA TODAY and WZZM 13, saidThursday it will buy Belo Corp. for $2.2 billion in a deal that willmake Gannett the USA's fourth largest owner of major networkaffiliates, reaching nearly a third of U.S. households.
Gannettwill acquire all outstanding shares of Belo for $13.75 per share incash, or approximately $1.5 billion, plus assume $715 million inexisting debt for an enterprise value of approximately $2.2 billion. Thetransaction, which has been unanimously approved by the boards ofdirectors of both companies, represents a 28.1% premium to the closingprice of Belo common stock on June 12, 2013.
Beloowns and operates 20 TV stations - nine in the top 25 markets - andtheir associated websites, including in Texas and the Pacific Northwestwhere Gannett does not have a major presence.
President and ChiefExecutive Officer Gracia Martore of Gannett, said, "We are thrilled tobring together two highly respected media companies with rich historiesof award-winning journalism, operational excellence and strong brandleadership."
Belo's President and Chief Executive Officer DuniaShive said, "This is an outstanding and financially compellingtransaction for our shareholders. It is also a testament to thetremendous value our employees have created over Belo's long history andto the strength of our brand in the media industry."
Headquarteredin McLean, Virginia, Gannett engages more than 100 million people everymonth through its network of broadcast, digital, mobile and publishingproperties. In addition to USA TODAY, Gannett owns regional newspaperssuch as the Detroit Free Press and The Courier-Journal in Louisville, Ky.
Theacquisition nearly doubles Gannett's current broadcast portfolio from23 to 43 stations, including stations to be serviced by Gannett throughshared services or similar sharing arrangements.
Shares in Gannettclosed down 1.59% on Wednesday but have soared to $19.85 from $12.50in July as the company has aggressively pursued efforts to diversify itsbusiness model.
Gannett earned $104.6 million, or 44 cents pershare, in the January-March period. That was up from $68.2 million, or28 cents per share, a year earlier. Revenue grew 1.6% to $1.24 billionfrom $1.22 billion.
In addition to WZZM 13, Gannett owns a number of newspapers in Michigan, including the Detroit Free Press, The Lansing State Journal, The Battle Creek Enquirer, The Port Huron Times and the Livingston Daily.