Gannett to Acquire Belo for $2.2 Billion (GCI, BLC)
Gannett, which is the publisher of USA Today announced on Wednesday that it will acquire Belo for $13.75 per share, or $1.5 billion, plus $715 million in debt. In total, the acquisition is worth about $2.2 billion in cash and debt being assumed.
The acquisition will nearly double Gannett’s stations from 23 to 43. The deal with allow GCI to increase its geographic diversity, as it will own stations in the top 25 markets in the U.S. The company will become the #1 CBS affiliate group and the #4 ABC affiliate group.
The deal will bring in about $175 million in annual run-rate synergies within 3 years after the acquisition is finalized. It will also help the company’s financial strength and free cash flow.
Gannett will continue its existing $300 million share repurchase plan and will maintain its quarterly dividend payments.
Gannett shares were up $5.20, or 26.20% during premarket trading Thursday. The stock is up 10% YTD.
Belo shares were up $2.99, or 27.87% during premarket trading Thursday. The stock is up 40% YTD.
The Bottom Line
Shares of Gannett Co., Inc. (GCI) have a 4.03% yield, based on Wednesday’s closing price of $19.85.
Shares of Belo Corp (BLC) have a 2.98% yield, based on Wednesday’s closing price of $10.73.
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