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New Media's Stock Plunge Sparks Worry in Gannett Acquisition

New Media's Stock Plunge Sparks Worry in Gannett Acquisition
(Jonathan Weiss/Dreamstime)

By    |   Wednesday, 13 November 2019 08:25 AM

New Media Investment Group is poised to acquire USA Today publisher Gannett despite a multitude of concerns as the buyer's stock price has plunged,

However, the significantly weakened deal to merge the nation’s two largest newspaper publishers is expected to be approved at a shareholder vote Thursday.

Since the cash and stock deal was unveiled on Aug. 5, "the biggest single barrier to getting it done has been the fast and furious erosion of New Media stock, which will be used to help pay for Gannett," the New York Post explained.

New Media stock’s (NEWM) closing price of $7.13 on Tuesday is far from its pre-deal price of $10.70 a share. The plunge has lowered the value of the offer from the original $1.4 billion to just over $1.1 billion, the Post said.

Gannett (GCI) shares closed at $10.04, up 19 cents on the day, but down 6.5 % from their $10.75-a-share price on Aug. 2.

Meanwhile, the NewsGuild, which represents workers at a number of papers from both companies, blasted the deal on Monday, saying it will lead to cuts that will close papers and hurt news coverage, the Post said.

“This merger will hurt the communities these media organizations serve,” said NewsGuild President Bernie Lunzer. “To fund the merger, local papers will likely disappear, jobs will be slashed and journalism will suffer.”

There are also outstanding regulator concerns over the financing by private equity firm Apollo Global Management, as the Post has previously reported.

The deal would create the largest American media company by newspaper circulation and potentially the largest by total digital audience, USA Today reported.

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New Media Investment Group is poised to acquire USA Today publisher Gannett despite a multitude of concerns as the buyer's stock price has spiraled down in a tailspin. 
new media, stock, gannett
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2019-25-13
Wednesday, 13 November 2019 08:25 AM
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