Gannett, the newspaper chain known for buying local newspapers and cutting back on operations, including news, is now on the receiving end of an acquisition — by the owners of GateHouse Media.
New Media Investment Group Inc. on Monday announced a “merger” that will result in the New York company taking over 50.5 percent of Gannett, the owner of USA TODAY and about 109 newspapers around the U.S., including Tennessee, Ohio, Michigan and Minnesota, plus more than 160 news operations in the United Kingdom.
The companies said the new entity will operate under the Gannett name and be based in Gannett’s hometown of McLean, Virginia.
Gannett shareholders will receive $6.25 in cash and 0.5427 of a New Media share for each Gannett share they hold, or total consideration of $12.06 per Gannett common share based on New Media’s closing stock price as of Aug. 2, 2019, and a premium of about 18 percent to the five-day volume-weighted average price of Gannett shares as of that date.
The deal will create one of the largest newspaper companies in the nation, according to Washington Business Journal.
“The breadth and depth of each company’s digital offerings will make the combined company a leading digital media player,” GateHouse said.
Not everyone in the newspaper community was surprised.
Newspaper industry observer and consultant Kevin Slimp wrote an analysis of the merger agreement, which is available here.
It’s been a forgone conclusion that this “merger” was going to take place for weeks. I’ve expected it for the past year.
Let’s face it. Gannett was out of choices. They cut their staffs, reduced pages and finally sold their buildings. It was sell or close. And who better to sell to than Gannett-Junior, er, GateHouse.
Two companies with similar business plans: Buy, cut, reduce, lose money, close, sell or merge. I wasn’t particularly interested in the same way I wasn’t overly-interested when rumor spread that Digital First Media might buy Gannett.
Gannett lists its “brands” on its corporate website. That list, by state, is available here. The merger will be particularly felt in many of Tennessee’s largest cities. Gannett owns these “legacy” Tennessee newspapers:
- The Commercial Appeal (Memphis)
- The Knoxville News Sentinel
- The Leaf-Chronicle (Clarksville)
- The Jackson Sun
- The Daily News Journal (Murfreesboro)
- The Tennessean (Nashville)
GateHouse owns several Tennessee newspapers, too, as part of its operations in 612 markets in 39 states. The Tennessee titles are:
- The Daily Herald (Columbia)
- The Advertiser News (Columbia)
- Value Guide (Columbia)
- The Oak Ridger
Gannett and GateHouse share similarities in buying up local newspapers as well as moving local jobs such as newspaper design into regional or national “hubs” that consolidate jobs.
The Tennessean sold its signature office building at 1100 Broadway, where it had been housed for 81 years, the Nashville Post said last summer.
GateHouse says this about its design operations:
Our Center for News & Design, based in Austin, Texas, employs more than 300 individuals and serves 93 daily newspapers, including 7 daily commercial partners, and 201 weekly newspapers.
The Nashville Scene in August 2017 reported on the fate of Nashville’s design studio:
Gannett will shut its Nashville design studio and move the production work of its Southeast newspapers to other hubs around the country. It’s the second studio closed by the company in recent months after an Asbury Park facility was shuttered in April. The move will affect 88 people.
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