Tegna to Spin off Cars.com, Weigh Options for CareerBuilderby
CEO Gracia Martore to retire when split takes place next year
Alex Vetter to lead Cars.com, Dave Lougee to be CEO of Tegna
Tegna Inc., the broadcaster that spun off newspaper publisher Gannett Co. last year, will list auto-sales website Cars.com as a separate public company and is evaluating a sale of its CareerBuilder job-hunting unit.
Chief Executive Officer Gracia Martore will retire when the split takes effect, expected in the first half of 2017, McLean, Virginia-based Tegna said Wednesday in a statement. Alex Vetter, a longtime Cars.com executive, will lead the independent company as CEO. Dave Lougee, president of Tegna Media, will become CEO of the television operation that remains.
A split could convince investors that Tegna’s assets are more valuable than its stock price suggests. Through Tuesday, the shares had dropped 36 percent since last year’s spinoff of the newspaper unit, hurt by a disappointing season for political advertising and a struggle by Cars.com to get more revenue from its partners. Tegna shares rose 3.4 percent to $20.84 at 9:39 a.m. in New York, valuing the company at $4.47 billion.
“Each business will have increased strategic, operating, and financial flexibility at a time when the broadcast and digital sectors are both rapidly evolving –- presenting both companies with a wealth of opportunities,” Martore said in the statement.
Tegna spun off Gannett last year after acquiring more local TV networks from Belo Corp. and London Broadcasting Co. The broadcasting business now has 46 stations and is the biggest affiliate of Comcast Corp.’s NBC and CBS Corp.’s flagship network.
Gannett bought out its partners in Cars.com in 2014 for $1.8 billion, then included the auto-sales website in the Tegna split. CareerBuilder is 53 percent owned by Tegna, with Tribune Media Co. and McClatchy Co. holding the rest.
Tegna will retain all the company’s debt when Cars.com is spun off, though the auto-sales website will pay its parent company a one-time dividend before the transaction to help maintain its credit rating. Tegna’s long-term debt, rated just below junk by Standard & Poor’s and Moody’s, was $4.3 billion at the end of June.