Gannett, the owner of USA TODAY, said Tuesday that will create two publicly traded companies as it moves to separate its broadcasting and digital businesses from its publishing division, a move aimed at unlocking the value of more profitable assets as print advertising sales continue to dwindle.
"The bold actions we are announcing today are significant next steps in our ongoing initiatives to increase shareholder value by building scale, increasing cash flow, sharpening management focus, and strengthening all of our businesses to compete effectively in today's increasingly digital landscape," said Gracia Martore, Gannett's CEO said in a statement.
PRESS RELEASE: Gannett to create two industry-leading companies
The broadcasting and digital company, which will be renamed and headed by Martore, will own or provide services to 46 television stations and operate several websites -- CareerBuilder.com and Cars.com -- that are not tied to newspapers. Gannett also said Tuesday that it will buy all of Cars.com shares it doesn't already own, totaling about 73%, for $1.8. billion in cash and the move nearly doubles its digital business.
The planned spin-off of the publishing business, including USA TODAY, 81 other daily newspapers and their affiliated websites, will be implemented through a tax-free distribution of its publishing assets to shareholders.
Investors, who have speculated for months on Gannett separating its print assets, cheered the move. Shares of the company rose 6.35% on pre-market trading Tuesday morning to $36.50.