Gannett To Spin-Off Publishing Business To Shareholders; To Acquire Cars.com

(RTTNews) - Gannett Co., Inc. (GCI) announced its plan to create two publicly traded companies with scale: one exclusively focused on its Broadcasting and Digital businesses, and the other on its Publishing business. The planned separation of the Publishing business will be implemented through a tax-free distribution of Gannett's Publishing assets to shareholders.

Following the separation, Gannett's Broadcasting and Digital company will trade on the NYSE. Gracia Martore will serve as CEO of the Broadcasting and Digital company. Following the separation, the Publishing company, which will retain the Gannett name, is expected to be listed for trading on the NYSE. Robert Dickey, currently president of Gannett's U.S. Community Publishing division, will become CEO of the Publishing company.

Gannett also announced it has signed an agreement to acquire full ownership of Cars.com, a digital company in the automotive space. The company will acquire the 73% interest it does not already own in Classified Ventures LLC, which owns Cars.com, for $1.8 billion in cash.

Classified Ventures, whose primary asset is the online car shopping website Cars.com, is a joint venture among A. H. Belo, The McClatchy Company, Tribune Media Company, Graham Holdings Company and Gannett Co., Inc.

Upon the close of the deal, A. H. Belo (AHC) will enter into a new, five-year affiliate agreement with Classified Ventures that will allow The Dallas Morning News to continue to resell Cars.com products and services exclusively in its local market. A. H. Belo owns 3.3% of CV and estimates its pre-tax, cash proceeds net of selling costs and funds held in escrow will be approximately $78 million. In the quarter the transaction closes, A. H. Belo expects to record a gain of approximately $76 million on the CV sale.

The McClatchy Company (MNI) estimates its share of pre-tax, cash proceeds will be $640 million. After-tax proceeds are anticipated to be approximately $406 million. McClatchy expects to record a gain on the sale of its interest in CV in the quarter that the deal closes. McClatchy's pro forma cash as of the end of the second quarter, reflecting the CV transaction and excluding expected tax payments for all recent transactions, is expected to be $606 million.

Upon the close of the sale, Tribune Publishing will enter into a five-year affiliate agreement with CV that will allow it to continue to sell Cars.com products and services exclusively in the eight key markets in which Tribune Publishing operates. Tribune Publishing Company is not an equity partner and will not receive proceeds from the sale.