Separation Expected To Be Completed June 29, 2015; TEGNA and new
Gannett To Begin Trading Independently
MCLEAN, Va.--(BUSINESS WIRE)--Jun. 8, 2015--
Gannett Co., Inc. (NYSE: GCI) today announced that its Board of
Directors has approved completion of the previously announced separation
transaction which will create two publicly traded companies: a
broadcasting and digital company named TEGNA and new Gannett, which will
retain the name Gannett Co., Inc. and will include its publishing
properties and affiliated digital assets. Under the terms of the
transaction, Gannett shareholders will retain their shares of Gannett
(which will be renamed TEGNA) and receive one share of new Gannett for
every two shares of Gannett stock they own on the record date of June
22, 2015, and new Gannett shares will begin “regular way” trading on
June 29, 2015. The spin-off remains subject to the conditions described
in the preliminary information statement filed on Form 10 with the U.S.
Securities and Exchange Commission.
Gracia Martore, President and CEO of Gannett, will serve as President
and CEO of TEGNA upon completion of the separation. She said, “In just
three weeks, we will create two industry leaders that will benefit
greatly from enhanced strategic, operating, financial and regulatory
flexibility as independent companies. We believe strongly that this
transaction will enhance performance, unlock shareholder value and give
investors access to more targeted investment opportunities with trading
valuations that better reflect the distinctive characteristics and
growth profiles of both companies.”
Robert Dickey, who currently serves as President, Gannett U.S. Community
Publishing, will become President and CEO of new Gannett following the
close of the separation. Mr. Dickey said, “We are incredibly excited
about the opportunities this transaction creates for our shareholders,
as well as our 19,600 employees who together serve our more than 110
local U.S. and UK communities each and every day. We’ve made great
strides in revolutionizing our content and delivery methods through our
widely successful all access content subscription model and digital
initiatives, as well as by leveraging our iconic USA TODAY brand to
create USA TODAY local content editions. We look forward to accelerating
this strong progress and delivering shareholder value as a more nimble
and highly focused independent company.”
Ms. Martore added, “Like new Gannett, TEGNA will benefit from impressive
scale and new opportunities following the separation. TEGNA will be one
of the largest and most geographically diverse broadcasters in the U.S.
– reaching approximately one third of all television households
nationwide, and will house leading digital businesses CareerBuilder and
Cars.com. These tremendous advantages, coupled with the enhanced focus
and flexibility afforded to TEGNA, are expected to drive strong margins,
long-term, sustainable growth and value creation.”
Upon completion of the separation, TEGNA will trade on the New York
Stock Exchange under the ticker symbol TGNA and new Gannett will trade
under the symbol GCI. Holders of Gannett common stock who sell Gannett
shares regular way before June 29, 2015 will also be selling their right
to receive shares of new Gannett common stock. Investors are encouraged
to consult with their financial advisors regarding the specific
implications of buying or selling Gannett common stock before the
distribution date.
Capital Structure
New Gannett initially will be virtually debt-free and expects to pay a
regular cash dividend of $0.64 per share annually and to commence a $150
million share repurchase program to be completed over a three-year
period. It expects to continue to invest in the business through organic
growth initiatives and potential acquisitions while returning capital to
shareholders. Concurrent with the separation, new Gannett expects to
enter into a revolving credit facility of approximately $500 million to
provide additional flexibility.
TEGNA, at separation, expects to enter into a new revolving credit
facility of approximately $1.3 billion. Gannett’s existing debt of
approximately $4.4 billion will remain with TEGNA. TEGNA has very
significant cash flow to invest in its businesses to drive strong
revenue growth while returning capital to shareholders. TEGNA expects to
pay a regular cash dividend of $0.56 per share annually which, combined
with new Gannett’s expected dividend, represents a 10% increase over the
current Gannett dividend. TEGNA also plans to commence a $750 million
share repurchase program to be completed over a three-year period.
Combined with the new Gannett authorization, this represents more than a
doubling of the current Gannett share repurchase program.
Both companies will have leverage levels well below peer companies and
will have the flexibility to adjust share repurchases based on business
conditions, new opportunities, and other factors.
TEGNA Board of Directors
The Company also announced that, effective as of the completion of the
separation, Henry McGee will serve on TEGNA’s Board of Directors. As
previously announced, current Gannett Board Chairman Marjorie Magner
will serve as Chairman of TEGNA’s Board of Directors and Howard Elias,
Lidia Fonseca, Jill Greenthal, Gracia Martore, Scott McCune, Susan Ness,
Bruce Nolop and Neal Shapiro also will serve as TEGNA directors.
New Gannett Board of Directors
Larry Kramer will retire from his position as President and Publisher of
USA TODAY and is expected to become a director of new Gannett following
the close of the transaction. The Company also announced that Debra
Sandler and Chloe Sladden will serve on Gannett’s Board of Directors. As
previously announced, John Jeffry Louis will serve as Chairman of
Gannett’s Board and President and CEO Robert Dickey, John Cody, Lila
Ibrahim and Tony Prophet also will serve as directors.
New Director Biographies
Henry McGeeis an accomplished broadcast media executive with a
passion for journalism. Currently a senior lecturer at Harvard Business
School where he teaches the required MBA course, Leadership and
Corporate Accountability, and an elective course, The Moral
Leader. Mr. McGee spent 34 years with Home Box Office, Inc. most
recently serving as President of HBO Home Entertainment from 1995 to
2013. He has been the recipient of numerous industry awards for his
pioneering use of Internet-based marketing and early adoption of the
high definition format for HBO’s releases.
Larry Kramer is a news industry veteran with a commitment to
innovation and entrepreneurial spirit. He has served as President and
Publisher of USA TODAY since May 2012, and will serve in that capacity
until the date of the distribution. He was previously a media consultant
and adjunct professor of Media Management at the Newhouse School of
Communications at Syracuse University and has held a number of positions
at CBS, including President of CBS Digital Media. He is also the Founder
and former CEO of MarketWatch, Inc.
Debra A. Sandleris a broad-gauge executive with strong marketing
and operating management experience as well as a record of creating and
building leading businesses and iconic brands. Most recently Ms. Sandler
has been with Mars, Inc. where she served as Chief Health and Wellbeing
Officer and President of Mars Chocolate, North America. Prior to that
she spent 10 years with Johnson & Johnson where she held various
positions including Worldwide President, McNeil Nutritionals LLC.
Chloe R. Sladdenis a digital media executive who was
instrumental in the success of Twitter, Inc., where she held the roles
of Vice President, Media from 2012 to 2014 and Director, Media
Partnerships from 2009 to 2012. Currently, Ms. Sladden is co-founder of
#angels, an early stage investment group.
Forward Looking Statements
Any statements contained in this communication that do not describe
historical facts may constitute forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995,
including the potential distribution of Gannett’s Publishing business to
its shareholders and the expected financial results of the two companies
after the separation. Any forward-looking statements contained herein
are based on our management's current beliefs and expectations, but are
subject to a number of risks, uncertainties and changes in
circumstances, which may cause actual results or company actions to
differ materially from what is expressed or implied by these statements.
Such risks include, but are not limited to: uncertainties as to the
timing of the spin-off or whether it will be completed, the possibility
that various closing conditions for the spin-off may not be satisfied or
may be waived, the expected tax treatment of the spin-off, the impact of
the spin-off on the businesses of Gannett or new Gannett and the
availability and terms of financing. Economic, competitive,
governmental, technological and other factors and risks that may affect
Gannett’s operations or financial results are discussed in our Annual
Report on Form 10-K for the fiscal year ended December 28, 2014, and in
subsequent filings with the U.S. Securities and Exchange Commission. We
disclaim any obligation to update these forward-looking statements other
than as required by law.
Advisors
Greenhill & Co. is acting as financial advisor on the separation
transaction and Wachtell, Lipton, Rosen & Katz is acting as legal
advisor.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an international media and marketing
solutions company that informs and engages more than 115 million people
every month through its powerful network of broadcast, digital, mobile
and publishing properties. Our portfolio of trusted brands offers
marketers unmatched local-to-national reach and customizable, innovative
marketing solutions across any platform. Gannett is committed to
connecting people – and the companies who want to reach them – with
their interests and communities. For more information, visit www.gannett.com.
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Source: Gannett Co., Inc.
Gannett Co., Inc.
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