With an aim to strengthen its position in the newspaper industry, Gannett Co., Inc. GCI recently acquired the remaining stake of 59.36% in the Texas-New Mexico Newspapers Partnership from Digital First Media. The diversified media conglomerate, which carries a Zacks Rank #3 (Hold), had to relinquish its 19.49% stake in the California Newspapers Partnership and pay additional cash for completion of this deal which provides it with full control over 11 newspapers in three states.
Gannett, which is in the process of spinning off its newspaper division, now has complete ownership of – El Paso Times in Texas; Alamogordo Daily News, Carlsbad Current-Argus, The Daily Times in Farmington, Deming Headlight, Las Cruces Sun-News and Silver City Sun-News in New Mexico; and Chambersburg Public Opinion, Hanover Evening Sun, Lebanon Daily News and the York Daily Record in Pennsylvania.
Gannett decided to split into two separate entities, one completely focusing on Broadcasting and Digital businesses, and the other concentrating on Publishing. This bold step is similar to that of the Tribune Company that spun off its newspaper business into a publicly traded company, Tribune Publishing Company TPUB. News Corporation NWSA and Time Warner Inc. TWX too have separated their broadcasting and digital properties from their sluggish print business.
Management declared the name of the Broadcasting and Digital Company as “TEGNA”, while the Publishing business will retain the name, "Gannett". The spin-off is expected to conclude by mid-2015.
We believe that the company’s decision to separate Publishing will help to better harness the potential of the Broadcasting and Digital businesses. Moreover, once the businesses are spun off, these will be led by separate management teams. These will also have a much more defined capital structure which will provide ample room for taking strategic decisions related to any investment, buyouts or new endeavors that will be beneficial for the particular business, and in no way affect the other entity.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment