The $1.5B acquisition agreement changed a lot of investors’ minds about how much companies in the sector are worth. Gannett was up 34% to $26.60, the highest it’s been in more than five years and increasing its market value about as much as it will pay for the deal itself. Belo, up 28.3% to $13.77, also hit a five-year high. But the deal seemed to rise the tide for others as well. For example, LIN TV was +20.1%, E.W. Scripps was +12.9%, Sinclair Broadcasting was +12.7%, the New York Times was +6%, and McClatchy was +5%. Gannett prompted investors to look more favorably on TV stations by agreeing to pay a price for Belo that equaled 9.4 times its recent cash flow. Recent deals including several made by Sinclair Broadcasting went for less than 8 times cash flow.
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