The company said that it will pay $13.75 a share to buy Belo Corporation (BLC), a 28% premium above Belo’s Wednesday closing price. It will also assumed $715 million in Belo debt. The deal, which nearly doubles Gannett’s TV business, is valued at $1.5 billion, the New York Times notes.
Not surprisingly, Belo shares shot up 27% in Thursday pre-market trading.
The deal must obtain regulatory clearance. Gannett expects to complete the merger by the end of this year.
By acquiring Belo, the number of TV stations owned by Gannett will jump from 23 to 43. The combined company will derive most of its revenue from broadcast and online media.
With the newspaper business under pressure, Gannett has been looking to extend its media operations into other formats.