NEW YORK (The Deal) -- Regional media companies E.W. Scripps (SSP) and Journal Communications (JRN) said Thursday they intend to merge and then separate television and newspaper assets into two publicly-traded companies.
Scripps, of Cincinnati, is the owner of 21 local television stations as well as daily newspapers in 13 U.S. markets and a collection of local and national digital information sites. Milwaukee-based Journal meanwhile owns or provides services for 14 television and 35 radio stations in 11 states and publishes the Milwaukee Journal Sentinel.
The companies said post-deal the merged broadcast company, which will keep the E.W. Scripps name and Cincinnati base, would own television and radio stations serving 27 markets and reaching 18% of U.S. television households, ranking as the fifth-largest independent television group. The newspaper company, to be called Journal Media Group and based in Milwaukee, would operate publications in 14 markets and generate annual sales of more than $500 million.
Terms of the deal call for Journal class A and class B shareholders to receive 0.5176 Scripps class A shares and 0.1950 shares in the new Journal Media. Current Scripps holders will receive 0.25 shares in Journal Media. Post deal, current Scripps shareholders will own 69% of the broadcasting entity and 59% of the print firm, with Scripps shareholders also promised a $60 million special cash dividend.The companies said that the moves would create about $35 million in annual synergies spread across the two new entities, resulting in two focused firms better able to compete in their respective markets. "In one motion, we're creating an industry-leading local television company and a financially flexible newspaper company with the capacity and vision to help lead the evolution of their respective industries," Scripps chairman and CEO Rich Boehne said in a statement. "For shareholders, this deal should unlock significant value as both companies gain efficiency, scale and more focus on the industry dynamics unique to these businesses."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV