New Media Investment to Buy Gannett for About $1.38B

(Bloomberg) -- (Updates with deal value, expected term loan size)

New Media Investment Group, GateHouse Media’s parent company, agreed to acquire Gannett in a cash-and-stock deal worth $12.06 per share based on New Media’s closing price on Aug. 2., combining the largest and second-largest U.S. newspaper publishers by circulation.

• The offer of $6.25 in cash and 0.5427 of New Media shares per Gannett shares is worth about $1.38 billion, based on 114.52 million shares outstanding
• GateHouse Chairman and CEO Mike Reed will assume the same roles at the combined company, which would publish about 265 daily newspapers
  • Paul Bascobert, the newly named CEO of Gannett, will become CEO of the combined company’s operating subsidiary
  • Gannett CFO Alison Engel is expected to be CFO of the combined organization
• After the deal closes, Gannett holders will own about 49.5% and New Media holders will own about 50.5%
• New Media plans a five-year senior secured term loan facility worth about $1.79 billion, to be funded with a commitment from Apollo Global Management
• NOTE: Gannett’s closing price was $7.63 on May 29, the day before Gannett and GateHouse were first reported to be holding merger talks
• NOTE: Earlier this year, Gannett rejected a $12-per-share hostile bid from hedge fund-backed MNG Enterprises, which was subsequently unsuccessful in a proxy fight to name directors to Gannett’s board
• NOTE: New Media Investment Group is operated by private-equity firm Fortress Investment, which is owned by Japan’s SoftBank

To contact the reporter on this story: Nick Lichtenberg in New York at nlichtenberg@bloomberg.net

To contact the editor responsible for this story: Chakradhar Adusumilli at cadusumilli@bloomberg.net

©2019 Bloomberg L.P.