Gannett, E.W. Scripps to check out Pulitzer

Friday, December 10, 2004

ST. LOUIS -- Gannett Co. -- the nation's largest newspaper publisher -- has announced publicly for the first time it may bid for Pulitzer Inc., the company exploring a possible sale some analysts expect to fetch $1.5 billion.

Another diversified media concern, E.W. Scripps Co., appeared more lukewarm, its president and CEO Ken Lowe telling Wall Street during a media conference Wednesday that "we'll kick the tires, but at this point that's about it."

While saying Gannett would "obviously be interested" in the St. Louis-based publisher of the St. Louis Post-Dispatch and more than a dozen other newspapers, Gannett chairman, president and CEO Douglas McCorkindale said the publisher of USA Today would be fiscally disciplined, unwilling to overpay.

"What we are seeing are some very aggressive prices on stand-alone properties, off the charts from our point of view," McCorkindale said during Wednesday's UBS AG media conference. "On the television side, the asking prices seem to be quite a bit higher than what we think are reasonable."

Tim Stautberg, a spokesman for Cincinnati-based Scripps, told Scripps' Cincinnati Post for Thursday's editions that "we take a look at everything that comes up, but to infer that there is more interest than that is stretching."

Scripps' holdings also include several fast-growing cable networks, including the Food Network and Home & Garden Television.

Gannett's 21 television stations include St. Louis' KSDK-TV.

Though Gannett until Wednesday had been publicly silent about any interest in Pulitzer, some already viewed it as a possible suitor because Gannett and Pulitzer were well-acquainted. The two companies have a joint operating agreement in Tucson, Ariz., between Pulitzer's Arizona Daily Star and Gannett's Tucson Citizen newspapers.

Pulitzer, with $423 million in revenue last year among the smallest newspaper companies with publicly traded shares, announced last month it has retained Goldman, Sachs & Co. as financial adviser and would explore "a range of strategic alternatives," including a potential sale.

The next day, Wall Street cheered the news, sending Pulitzer shares surging 17 percent in trading on the New York Stock Exchange, well above the company's 52-week closing high at the time of $56.64.

On Thursday, Pulitzer shares were up 25 cents to $63.60 in early afternoon trading, while Gannett shares were up 13 cents to $81.52. Scripps shares were up 29 cents to $45.99.

Mergers of newspaper companies have slowed since 2000, when Gannett bought Central Newspapers Inc. for $2.6 billion and Tribune Co. agreed to buy Times Mirror Co. for $8 billion.

Pulitzer president and chief executive Robert Woodworth has told Post-Dispatch employees that the process could take months, and that "it is far from certain that any transaction will be reached or on what terms."

In addition to its flagship Post-Dispatch and the newspaper in Tucson, Pulitzer operates a dozen other dailies and the Suburban Journals of Greater St. Louis, a group of 38 weeklies and niche publications.

Gannett said Wednesday it forecasts fourth-quarter earnings of $1.45 to $1.49 per share. Current estimates by analysts polled by Thomson First Call range from $1.45 to $1.56 per share.

Gannett also reported that its total revenues, including results from broadcasting, rose 5.1 percent to $628.6 million in November compared with the same month last year.

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