Gannett Co (GCI) / Belo (BLC) Deal Puts Peers in Spotlight
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Price: $189.57 +0.49%
Rating Summary:
17 Buy, 1 Hold, 0 Sell
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
17 Buy, 1 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Gannett Co., Inc. (NYSE: GCI) and Belo Corp. (NYSE: BLC) jointly announced today that they have entered into a definitive merger agreement under which Gannett will acquire all outstanding shares of Belo for $13.75 per share in cash, or approximately $1.5 billion, plus the assumption of $715 million in existing debt for an enterprise value of approximately $2.2 billion.
Commenting, Wells Fargo analyst Marci Ryvicker said, "For two companies who have not been much involved in M&A, we were (positively) surprised by this morning's announcement . . . The purchase price represents a 28% premium to BLC's 6/12 close and the multiples disclosed in today's release were a seller's multiple of 9.4x blended 2011/2012 EBITDA and a buyer's multiple of 5.4x when including synergies."
"Better yet, thinking about the rest of our coverage, if we were to apply the ~9.4x fair market multiple (2013E/2014E EBITDA) to Nexstar Broadcasting (Nasdaq: NXST), Sinclair Broadcast Group Inc. (Nasdaq: SBGI), LIN TV Corp. (NYSE: TVL) and Gray Television (NYSE: GTN), we get stock price valuations of $50, $35, $26, and $7, respectively, and this is before any additional M&A," he said.
Wells Fargo has an Outperform rating on Nexstar Broadcasting, Belo, and Sinclair. Gray and Lin TV are rated Neutral.
For an analyst ratings summary and ratings history on Nexstar Broadcasting Group click here. For more ratings news on Nexstar Broadcasting Group click here.
Shares of Nexstar Broadcasting Group closed at $27.19 yesterday.
Commenting, Wells Fargo analyst Marci Ryvicker said, "For two companies who have not been much involved in M&A, we were (positively) surprised by this morning's announcement . . . The purchase price represents a 28% premium to BLC's 6/12 close and the multiples disclosed in today's release were a seller's multiple of 9.4x blended 2011/2012 EBITDA and a buyer's multiple of 5.4x when including synergies."
"Better yet, thinking about the rest of our coverage, if we were to apply the ~9.4x fair market multiple (2013E/2014E EBITDA) to Nexstar Broadcasting (Nasdaq: NXST), Sinclair Broadcast Group Inc. (Nasdaq: SBGI), LIN TV Corp. (NYSE: TVL) and Gray Television (NYSE: GTN), we get stock price valuations of $50, $35, $26, and $7, respectively, and this is before any additional M&A," he said.
Wells Fargo has an Outperform rating on Nexstar Broadcasting, Belo, and Sinclair. Gray and Lin TV are rated Neutral.
For an analyst ratings summary and ratings history on Nexstar Broadcasting Group click here. For more ratings news on Nexstar Broadcasting Group click here.
Shares of Nexstar Broadcasting Group closed at $27.19 yesterday.
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