Gannett To Acquire Journal Media Group For About $280 Mln

(RTTNews) - Gannett Co., Inc. (GCI) agreed to acquire all of the outstanding common stock of Journal Media Group, Inc. (JMG) for approximately $280 million, net of acquired cash.

As per the terms of the transaction, which was unanimously approved by the boards of directors of both companies and is subject to Journal Media Group shareholder approval, Journal Media Group shareholders will receive cash of $12.00 per share in cash. Based on the closing price of Journal Media Group on October 7, 2015, this represents a premium of 44.6%. Gannett will finance the transaction through a combination of cash on hand and borrowings under Gannett's $500 million revolving credit facility.

It is expected that the deal will be immediately earnings per share accretive: approximately $0.10 - $0.15 per share in the first full year and $0.20 - $0.25 in the second year. The deal will add about $450 million to Gannett's annual revenues

The combination of Journal Media Group and Gannett will create a portfolio of 106 local markets in the U.S. and will result in a combined digital audience of more than 100 million unique domestic visitors a month.

The transaction is not expected to disturb the tax-free treatment of the prior transactions between The E.W. Scripps Company and Journal Communications, Inc. whereby Journal Media Group has previously agreed to indemnify Scripps for the adverse tax consequences emanating from its actions or failures to act following the closing of that transaction. Journal Media Group, prior to entering into the merger agreement with Gannett, has delivered an unqualified tax opinion from its law firm to Scripps, which opinion Scripps has deemed to be acceptable in form and substance.

This transaction is subject to customary closing conditions, including, approval of the merger by holders of a majority of the outstanding shares of Journal Media Group common stock and antitrust regulatory clearance. The transaction is expected to close in the first quarter of 2016.