Gannett Announces Terms of Offer to Acquire U.K.’s News Communications & Media
ARLINGTON, Va. – Gannett Co., Inc. today announced the terms of a recommended offer to acquire the entire issued and to-be-issued share capital of News Communications & Media PLC (“Newscom”) by Gannett U.K. Limited, a wholly owned subsidiary of Gannett. The offer has been unanimously recommended by the board of directors of Newscom. Gannett has received irrevocable undertakings to accept the offer from all of the directors of Newscom, related parties and from institutions representing in the aggregate approximately 15.65 percent of Newscom’s issued shares.
Under the offer, Gannett will pay Newscom shareholders 1800 pence (US $28.44) per share in cash, valuing the entire issued share capital of Newscom at approximately £444 million (US $702 million). Gannett also will assume or retire Newscom’s existing debt.
Newscom is the eighth largest regional newspaper publisher in the U.K. It publishes 99 titles including four daily newspapers, with the remainder a mix of paid and free weeklies and niche publications. Newscom also owns a printing company, Southernprint, as well as an interest in magazine publishing together with leaflet distribution and electronic publishing.
Gannett is an international news and information company that publishes 74 daily newspapers in the USA, including USA TODAY, the nation’s largest-selling daily newspaper. The company also owns a variety of non-daily publications and USA WEEKEND, a weekly newspaper magazine. Newsquest plc, a wholly owned Gannett subsidiary acquired in mid-1999, is one of the largest regional newspaper publishers in England with a portfolio of more than 180 titles. Its publications include 11 daily newspapers with a combined circulation of approximately 450,000. Newsquest also publishes a variety of non-daily publications, including Berrow’s Worcester Journal, the oldest continuously published newspaper in the world. Gannett also operates 22 television stations and is an Internet leader with sites sponsored by most of its TV stations and newspapers including USA TODAY.com, one of the most popular news sites on the Web.
In announcing the offer, Douglas H. McCorkindale, President of Gannett said, “We are extremely pleased that Newscom will become part of Gannett. Newscom’s publications provide a significant opportunity to expand and strengthen our operations in the U.K. The management and employees of Newscom share our commitment to serve the readers and advertisers in the communities in which we each do business.”
James Brown, Executive Chairman of Newsquest, said, “Newscom is a fine company with a great history and we are very pleased that it now joins our newspapers. We feel that a combination of its existing strength added to that of Newsquest’s and Gannett’s will bring exciting new opportunities both to all of our newspapers and related Internet sites. Readers and advertisers will be the beneficiaries.”
John Salkeld, Chairman of Newscom, said, “Newscom has worked hard to restructure its portfolio of businesses and to create a platform for the future development of the group. Whilst we have demonstrated the success of this strategy by significantly improved performance, we believe the continued implementation of the group’s strategy can most effectively be carried out as part of the larger Gannett Group where it will have access to additional resources and a greater ability to pursue strategic opportunities in the UK regional newspaper sector. In the light of this, we believe that the Offer from Gannett fairly reflects the value and prospects of the Newscom Group and provides an attractive means by which Newscom shareholders may realise their investment.”
In the year ended June 26, 1999, Newscom reported operating revenues of £139.1 million (US $228.5 million) and operating income of £24.1 million (US $39.6 million). For the 26 weeks ended Dec. 25, 1999, Newscom reported an operating profit of £12.2 million (US $19.7 million) on operating revenues of £71 million (US $114.6 million). Gannett’s operating revenues from continuing operations totaled $5.3 billion and operating income from continuing operations was $1.6 billion for the year ended Dec. 26, 1999.