Media General says exploring sale of newspapers
(Reuters) - Broadcaster and publisher Media General Inc said it is exploring a sale of its loss-making newspaper operations, and that it has received inquiries from several third parties regarding the potential purchase of certain of its print assets.
Shares of the company, which receives more than half of its revenue from the publishing business, rose 5 percent in extended trading after the announcement.
Media General, which publishes newspapers like The Tampa Tribune and the Winston-Salem Journal and owns TV station WFLA-TV, has been battling rising publishing costs and dwindling ad revenue.
The company, which started operations in 1850 as a newspaper publisher, had a long-term debt of $665.5 million on its books as of September 25, 2011.
It has posted a loss in seven of the last eight reported quarters.
"(The company) will consider asset sales at valuations that reflect the strength of its properties as a means of reducing total debt outstanding over time," Media General said in a statement.
Earlier this month, the company said it is working with its lender group to postpone the maturity of $363 million debt until next year.
Regional newspapers have been struggling recently because of weak local retail and national advertising, partly reflecting the economy's broader travails.
The announcement comes almost two months after New York Times Co said it will sell 16 regional newspapers spread across the U.S. Southeast and California to Halifax Media Holdings for $143 million.
Media General did not provide any definitive timetable for the evaluation process and said there could be no assurance that any transaction will take place.
Investment banking advisory firm Peter J. Solomon Company is assisting Media General with the strategic evaluation process.
(Reporting by Unnikrishnan Nair and Himank Sharma; Editing by Don Sebastian)