UPDATE, 6/17/13, 1:15 p.m. EDT: Information on Covington & Burling's role in advising Gannett Co. on its purchase of Belo Corp. has been added to the fourth and seventh paragraphs below.
As traditional print media companies continue to struggle to find their financial footing, the country's largest newspaper publisher is expanding its television broadcasting operations. Gannett Co. said Thursday it has agreed to purchase TV station operator Belo Corporation in a deal valued at $2.2 billion, including assumed debt.
The transaction's terms call for McLean, Virginia–based Gannett—whose 82 daily newspapers include USA Today, The Arizona Republic, and The Des Moines Register—to pay $13.75 in cash for each share of Dallas-based Belo, a 28.1 percent premium over the target's Wednesday closing price. All told, Gannett will pay $1.5 billion in cash for Belo, while assuming $715 million of the company's existing debt. The deal is expected to close by the end of the year, pending the approval of antitrust regulators, the Federal Communications Commission, and two-thirds of Belo shareholders.
Gannett said the acquisition will "create a broadcast 'Super Group' " by nearly doubling its television portfolio from 23 to 43 stations and making the company the country's fourth-largest owner of major television network affiliates. Belo's holdings include ABC, CBS, NBC, FOX, and CW affiliates that reach more than 14 percent of U.S. households in 15 different television markets. (Belo itself used to be in the newspaper publishing business before spinning off subsidiary A.H. Belo Corporation—whose holdings include The Dallas Morning News and The Providence Journal—into a separate company in 2008.)
For legal advice on the purchase, Gannett has turned to attorneys at Nixon Peabody, Paul Hastings, and Covington & Burling. Washington, D.C.–based M&A partner John Partigan and New York–based M&A partner Richard Langan Jr. are leading Nixon Peabody's team, which also includes benefits partner Brian Kopp, tax partner Christian McBurney, and antitrust partner Gordon Lang.
Nixon Peabody's past work for Gannett includes advising the media company on its acquisition of the Detroit Free Press from Knight Ridder for an undisclosed amount in 2005. The firm also represented Gannett in connection with its $2.6 billion purchase of Central Newspapers Inc. in 2000. (Rochester, New York—the birthplace of Nixon Peabody predecessor firm Nixon, Hargrave, Devans & Doyle—is also home to the Gannett-owned Democrat and Chronicle.)
M&A partner Eric Dodson Greenberg is leading the Paul Hastings team that is also providing Gannett with legal counsel on the Belo acquisition. The firm's antitrust chair, Michael Cohen, is also working on the matter, along with leveraged finance and capital markets partner Michael Chernick and associate Matthew Gibson.
Covington & Burling lawyers in D.C. advised Gannett on Federal Communications Commission aspects on the deal. The Covington team includes partner Jennifer Johnson, who cochairs the firm's communications and media practice; Kurt Wimmer, a partner and the U.S. head of the global privacy and data security practice; special counsel Eve Pogoriler; and associates Libbie Canter and Kara Azocar.
Todd Mayman serves as Gannett's general counsel.
Simpson Thacher & Bartlett corporate partner Eric Swedenburg is leading a team from the firm representing J.P. Morgan Securities in its role as financial adviser to Gannett in connection with the deal.
Belo, meanwhile has turned to Wachtell, Lipton, Rosen & Katz as its outside counsel on the transaction. Corporate partners Edward Herlihy and Nicholas Demmo are leading a Wachtell team that also includes executive compensation and benefits partner Jeannemarie O'Brien and tax partner Joshua Holmes. The Wachtell associates working on the matter are Minsun Lee, Kate Napalkova, and S. Iliana Ongun.
Russell Coleman is Belo's general counsel.
Gannett's Belo acquisition is the second large transaction involving television stations in the past week to create work for Am Law firms. The Am Law Daily reported last week about the all-stock merger between station operators Media General and New Young Broadcasting in a deal that generated advisory roles to Debevoise & Plimpton, Fried, Frank, Harris, Shriver & Jacobson, and Gibson, Dunn & Crutcher.