Dex One and SuperMedia to merge, shares soar
(Reuters) - Shares of directory publishers Dex One Corp DEXO.N and SuperMedia Inc SPMD.O rose more than 50 percent on Tuesday after the companies said they will combine in a stock-for-stock merger.
Dex One shareholders are expected to own about 60 percent and SuperMedia shareholders the rest of the combined company, the publishers of yellow pages and online directories said in a joint statement.
"By joining together, we will have nationwide presence to increase market share and achieve operating and service efficiencies," SuperMedia Chief Executive Peter McDonald said.
McDonald will become CEO of the combined company while Dex One CEO Alfred Mockett will continue to lead Dex One through the close of the transaction, after which he will step down.
The combined company, to be called Dex Media, expects to save between $150 million and $175 million annually by 2015 by cost-cutting measures including reducing headcount.
It will incur between $100 million and $120 million in one-time transition expenses.
Dex One shareholders will receive 0.20 shares for each Dex One share they own, and Super Media shareholders will receive 0.4386 shares for each SuperMedia share they own.
Shares of Super Media, which has a market value of $40.4 million, rose 54 percent to $3.99 on the Nasdaq on Tuesday morning.
Shares of Dex One, valued at $63 million, rose 52 percent to $1.89 on the New York Stock Exchange.
(Reporting by Sruthi Ramakrishnan in Bangalore,)