A. H. Belo Announces Agreement to Sell Its Investment in Classified Ventures; Remains Cars.com Reseller
August 05 2014 - 5:30AM
Business Wire
A. H. Belo Corporation (NYSE: AHC) (A. H. Belo or the Company)
announced today that it, along with its partners in Classified
Ventures, LLC (CV), entered into a definitive agreement to sell its
units in CV to Gannett Co., Inc. for a price that values CV at $2.5
billion. The transaction is expected to close before the end of
2014, subject to regulatory review.
Upon the close of the transaction, A. H. Belo will enter into a
new, five-year affiliate agreement with CV that will allow The
Dallas Morning News to continue to resell Cars.com products and
services exclusively in its local market. The affiliate agreement
increases the wholesale rate that A. H. Belo will pay to CV for
selling Cars.com products.
CV, whose primary asset is the online car shopping website
Cars.com, is a joint venture among A. H. Belo, The McClatchy
Company, Tribune Media Company, Graham Holdings Company and Gannett
Co., Inc. A. H. Belo owns 3.3% of CV and estimates its pre-tax,
cash proceeds net of selling costs and funds held in escrow will be
approximately $78 million. The funds held in escrow of
approximately $3 million are expected to be released twelve months
after the closing date of the transaction.
Jim Moroney, chairman, president and Chief Executive Officer of
A. H. Belo, said, “We have been able to monetize our investment in
Classified Ventures at a fair price and retain our ability to
remain a reseller of Cars.com products for the next five years,
which is an excellent outcome for our Company. We are very pleased
that Gannett will own Classified Ventures and be our partner as we
continue to build the Cars.com franchise in the greater
Dallas area.
“The proceeds from this transaction will allow A. H. Belo to
continue with its strategy of investing in advertising and
marketing services companies to allow for revenue growth and
diversification. As always, the Company will balance investment
opportunities with alternatives to continue to return capital to
shareholders.”
In the quarter the transaction closes, A. H. Belo expects to
record a gain of approximately $76 million on the CV sale. As a
result of taxable gains on the sales of Classified Ventures
(including the gain from the sale of Apartments.com), The
Providence Journal newspaper operations, the site of the former
commercial printing operation in Riverside, CA and land in southern
Dallas, TX, the Company expects to fully utilize its net operating
loss and capital loss carry forwards during 2014.
Moelis & Company LLC acted as exclusive financial advisor
and Skadden, Arps, Slate, Meagher & Flom LLP acted as exclusive
legal advisor to A. H. Belo Corporation, its selling partners and
CV.
About A. H. Belo
Corporation
A. H. Belo Corporation (NYSE: AHC) is a leading local news and
information publishing company with commercial printing,
distribution and direct mail capabilities, as well as businesses
with expertise in emerging media and digital marketing. With a
continued focus on extending our media platform, we are able to
deliver news and information in innovative ways to new audiences
with diverse interests and lifestyles. For additional information,
visit ahbelo.com, email invest@ahbelo.com.
A. H. Belo CorporationAlison K. Engel, 214-977-2248Senior Vice
President/Chief Financial Officerwww.ahbelo.com
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