Gannett Sets $410 Million Newspaper Sale to GateHouseLeon Lazaroff and Ted Bunker
Gannett Co., owner of USA Today, agreed to sell four daily newspapers to GateHouse Media Inc. for $410 million, including one of its original publications.
The newspapers being sold include the Utica Observer-Dispatch in upstate New York, McLean, Virginia-based Gannett said today in a statement. It is one of six newspapers owned by Frank Gannett when he formed the company in 1923.
Gannett, the largest U.S. newspaper publisher, has been trying to counter declining readership and advertising by forming regional groups to cut costs. Last month, Gannett agreed to buy two Tribune Co. newspapers in Connecticut for $73 million. Both newspapers are near Gannett's suburban New York operations in Westchester County.
``This sale makes perfect sense for Gannett as we move forward under our strategic plan,'' Sue Clark-Johnson, president of Gannett's Newspaper Division, said in the statement. The other daily newspapers being sold are the Norwich Bulletin in Connecticut, the Rockford Register Star in Illinois and the Herald-Dispatch in Huntington, West Virginia.
GateHouse will finance the transaction with a combination of equity and debt, the company said in a separate statement.
Among the Largest
The newspapers will be among the largest published by GateHouse, owner of the Patriot Ledger in Quincy, Massachusetts, with a daily circulation of about 55,200. The daily circulation figures for the four put the Register Star's daily circulation tops that at about 59,100.
Daily circulation figures for the other newspapers are 41,000 in Utica, 27,700 in Huntington and 23,600 for Norwich, which is in eastern Connecticut.
GateHouse has attracted investor interest because the stock pays a dividend of 7.2 percent. Gatehouse is the only newspaper stock of nine covered by Goldman Sachs analyst Peter Appert that he rates a ``buy.''
GateHouse completed the $380 million acquisition of seven daily newspapers from Copley Press Inc. yesterday. The Fairport, New York-based company owns more than 450 community publications including 84 daily newspapers in 19 states. GateHouse, controlled by Fortress Investment Group Inc., raised $248.4 million in an initial public share offering in October.
Gannett and GateHouse said the sale should be completed by the end of the month. The agreement was announced after the close of regular trading on U.S. stock markets.
Shares of Gannett rose 58 cents, or 1 percent, to $57.48 at 4 p.m. in New York Stock Exchange composite trading. They have declined 4.9 percent this year. GateHouse rose 21 cents, or 1 percent, to $20.53 and has gained 11 percent.
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