Gannett Co. buying Midwest, South newspapers for $280M

The newspapers that came from Scripps included the Memphis Commercial Appeal, the Knoxville News Sentinel and the Naples (Fla.) Daily News.

Closure of the deal is subject to Journal Media shareholder approval and antitrust regulatory clearance.

Gannett Co. of McLean, Virginia, plans to offer $300 million for Milwaukee-based Journal Media, the report says, citing unidentified sources. “I’d expect that Gannett would want to continue to enhance those relationships with resources, with bringing all of the scale that they have to enriching the products that we’re offering in our local markets”.

The transaction has been approved by the boards of directors of both Gannett and Journal Media Group.

Gannett will finance the transaction through a combination of cash on hand and borrowings under Gannett’s $500 million revolving credit facility.

In a statement, newly minted Gannett CEO Robert Dickey touted the merger as the first step in the company’s industry consolidation strategy.

“This acquisition is a ideal fit for Gannett”, said John Maher, president and publisher of RGJ Media. It also swung to profitability, with net earnings of $3.3 million versus a loss of $10.5 million a year ago.

Tim Stautberg, president and chief executive officer of Journal Media Group, said the merger with Gannett “marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage”.

Journal Media shareholders will receive $12 a share in cash. “Our combined company will be an industry leader, dedicated to the local communities we serve, committed to generating value for shareholders and empowering communities to connect, act and thrive”, Dickey concluded.

Since the split, Gannett took control of a few additional newspapers in Texas, New Mexico and Pennsylvania as part of an asset swap with Digital First Media, and it acquired 28 weekly and a daily newspaper in the United Kingdom.

After the deal, Gannett will have a media outlet in 106 local markets in the U.S. Its print circulation will rise by about 675,000 on weekdays and 950,000 on Sundays, it said.

In April, Journal Media Group was formed from the merger of E.W. Scripps Co and Journal Communications’ newspaper operations.