Fox, Time Warner, and Tribune did it — and now Gannett is, too. The nation’s largest newspaper publisher, and a major owner of TV stations, says it will create a publicly traded company for its publishing businesses which include USA Today. Gannett shareholders will receive stock in the new entity, making the transaction tax free. Along with this announcement, the company says it has an agreement to pay $1.8B for the 73% stake it doesn’t already own in Cars.com. Gannett shares are up 5.6% in pre-market trading.
The changes “are significant next steps in our ongoing initiatives to increase shareholder value by building scale, increasing cash flow, sharpening management focus, and strengthening all of our businesses to compete effectively in today’s increasingly digital landscape,” CEO Gracia Martore says, The acquisition of Cars.com “doubles our growing digital business, while our recent acquisitions of Belo and London Broadcasting doubled our broadcasting portfolio. These acquisitions, combined with our successful initiatives over the past 2-1/2 years to strengthen our Publishing business, make this the right time for a separation into two market-leading companies.”
There’s no name yet for the broadcasting and digital company, which will remain in McLean, VA where Gannett is currently headquartered. Martore will continue to run the entity which will have 46 TV stations making it the largest indepndent owner of NBC and CBS affiliates as well the fourth largest owner of ABC stations. The digital side includes CareerBuilder, as well as Cars.com.
The publishing operation also will remain in McLean, and be run by Robert Dickey, who’s now in charge of the U.S. Community Publishing unit. USA Today is the largest circulating daily publication according to the Alliance for Audited Media. Gannett also has 81 local U.S. daily publications and UK’s Newsquest, as well as 200 weekly print products, magazines and trade publications.
Gannett says it’s still hammering out details for the separation, including membership on the different boards of directors. But they expect the spinoff to be completed by the middle of 2015.