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Gannett could raise div, spin off TV unit: report
2007-04-08
U.S. newspaper publisher Gannett Co. Inc. (NYSE:GCI) could more than double its dividend or spin off its television business to placate shareholders who have watched rival publisher Tribune Co. (NYSE:TRB) receive a buyout bid, according to the April 9 issue of Barron's. Gannett, the publisher of USA Today and newspapers in small and mid-sized U.S. cities, could afford to raise its annual dividend to as much as $4 per share or more from its current rate of $1.24, according to Barron's. It noted that analysts said the company was under increasing pressure to improve returns to shareholders. Gannett's price-to-earnings ratio is the lowest in the newspaper industry with a share price that is about 12 times estimated 2007 profits, Barron's said. It noted that real estate mogul Sam Zell's buyout offer of $34 per share for Tribune is 17 times that company's estimated 2007 earnings per share. Because of Gannett's $13.2 billion market value and its $5 billion debt, the newspaper said the publisher was not a likely candidate for a leveraged buyout. But it said it could create value by spinning off its TV operations, which include a collection of NBC stations.
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