March 25, 2023

DealBook: Gannett Agrees to Buy Belo for $1.5 Billion

Gracia Martore, chief executive of Gannett.Carlo Allegri/ReutersGracia C. Martore, chief executive of Gannett.

The Gannett Company agreed on Thursday to buy the Belo Corporation for about $1.5 billion in cash, in a deal that almost doubles Gannett’s television operations.

Under the terms of the deal, Gannett will pay $13.75 a share in cash, 28 percent above Belo’s closing price on Wednesday. Gannett will also assume $715 million of Belo’s existing debt.

The takeover is a move by Gannett to diversify its media operations, at a time when traditional print media continues to struggle. The company said the transaction would increase its television portfolio to 43 stations from 23, while its revenue from digital and broadcasting operations would make up two-thirds of its pro forma earnings before interest, taxes, depreciation and amortization.

“We have been successfully transforming Gannett into a diversified multimedia company with broadcast, digital and publishing components across high-growth markets nationwide, and this is another important step in the process,” Gracia C. Martore, Gannett’s chief executive, said in a statement.

In pre-market trading, shares of Gannett were up more than 25 percent.

Ms. Martore added on a conference call with analysts that she began talking with her counterpart at Belo, Dunia A. Shive, some time ago. The two eventually concluded that a merger to create one of the country’s biggest providers of local broadcast television made sense, and eventually began exclusive takeover negotiations.

“This is a true win-win,” Ms. Martore said on the call.

She added that Gannett may look at more opportunities to buy up television stations, though Belo stood out as uniquely compelling.

The deal is expected to close by the end of the year, subject to approval by regulators.

JPMorgan Chase and the law firms Nixon Peabody and Paul Hastings advised Gannett. RBC Capital Markets and the law firm Wachtell, Lipton, Rosen Katz advised Belo.

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U.S. Stock Futures Are Flat in Pre-Market Trading

The decline to 388,000 in claims for unemployment benefits last week was less than expected, but the drop still signaled improvement in the labor market.

The data also followed an encouraging ADP report on private-sector jobs and precedes Friday’s employment report from the government.

“Claims are going in the right direction, and that gives us hope that we’ll see a good employment number tomorrow,” said Jerry Harris, president of asset management at Sterne Agee in Birmingham, Ala.

The week has been marked by some of the year’s lowest volumes as traders opt to ride the quarter’s gainers amid global risks. The SP 500 is up 5.6 percent for the quarter, based on Wednesday’s close.

“Today will be quiet as people have already established their positions in preparation for a report that is expected to be positive tomorrow,” Harris said.

The Dow Jones industrial average was up 4.84 points, or 0.04 percent, at 12,355.45. The Standard Poor’s 500-stock Index was down 0.75 point, or 0.06 percent, at 1,327.51. The Nasdaq Composite Index was up 0.98 point, or 0.04 percent, at 2,777.77.

The Institute for Supply Management-Chicago said its index of Midwest business activity fell in March to 70.6 from 71.2 in February. The data was near economists’ expectations and stocks reacted little.

David Sokol, the man widely seen as the leading successor to Warren Buffett to head up Berkshire Hathaway, has resigned after buying shares in chemical company Lubrizol before pushing Buffett to acquire it.

In an interview on CNBC, Mr. Sokol said he did nothing wrong in buying the shares.

Berkshire’s Class B shares fell 1.8 percent to $83.90.

The Macau unit of Las Vegas Sands said it is being investigated by the Hong Kong Securities and Futures Commission for alleged regulatory violations. Shares fell 4.9 percent to $41.41.

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