October 8, 2015 / 12:31 AM / 3 years ago

Gannett Co to buy Journal Media for $280 million

(Reuters) - Gannett Co Inc, publisher of USA Today, said on Wednesday it will buy Journal Media Group for $280 million.

The logos of Gannett Co and USA Today are seen outside their corporate headquarters in McLean, Virginia, July 23, 2013. REUTERS/Larry Downing

The price of $12 a share represents an almost 45 percent premium to Journal Media’s closing share price of $8.29

Tysons Corner, Virginia-based Gannett said the deal will immediately add to its earnings by 10 cents to 15 cents per share in the first full year and 20 cents to 25 cents in the second year. The deal, which is expected to close in the first quarter of 2016, will add about $450 million to Gannett’s annual revenues, it added.

Gannett expects to realize $25 million in savings over the next two years as the joint company consolidates printing and distribution assets.

Gannett will finance the acquisition with cash and borrowings under its $500 million revolving credit facility.

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

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

E.W. Scripps said on Wednesday it expects the merger of its newspaper operations with those of Journal Communications to remain tax free for Scripps and its shareholders if Journal Media Group is acquired by Gannett Company.

Gannett Co in June spun off its broadcast and digital business into Tegna Inc, a S&P 500 component valued at $5.8 billion, and its publishing arm as Gannett valued at $1.72 billion.

Gannett said Stephens Inc is acting as its financial adviser on the deal, while Methuselah Advisors is acting for Journal Media Group.

Reporting by Rachel Chitra in Bengaluru; Editing by Lisa Shumaker and Cynthia Osterman

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