Gannett could raise div, spin off TV unit: report

NEW YORK (Reuters) - U.S. newspaper publisher Gannett Co. Inc. (GCI.N) could more than double its dividend or spin off its television business to placate shareholders who have watched rival publisher Tribune Co. TRB.N receive a buyout bid, according to the April 9 issue of Barron's.

Gannett, the publisher of USA Today and newspapers in small and mid-sized U.S. cities, could afford to raise its annual dividend to as much as $4 per share or more from its current rate of $1.24, according to Barron's. It noted that analysts said the company was under increasing pressure to improve returns to shareholders.

Gannett's price-to-earnings ratio is the lowest in the newspaper industry with a share price that is about 12 times estimated 2007 profits, Barron's said. It noted that real estate mogul Sam Zell's buyout offer of $34 per share for Tribune is 17 times that company's estimated 2007 earnings per share.

Because of Gannett's $13.2 billion market value and its $5 billion debt, the newspaper said the publisher was not a likely candidate for a leveraged buyout.

But it said it could create value by spinning off its TV operations, which include a collection of NBC stations.