USA Today owner, Gannett agrees to buy out other owners of Cars.com
05 Aug 2014
USA Today owner, Gannett Co, has agreed to buy out the other companies that own Cars.com for $1.8 billion, Bloomberg reported citing a person familiar with the matter.
The company already owns about 27 per cent of the auto-sales website, so the deal values the whole business at about $2.5 billion, according to the person who asked not to be identified discussing private information.
An announcement to the effect could come as soon as Tuesday.
Cars.com, owned by Classified Ventures was started in 1998. It allows users to check prices, compare models and read reviews of auto dealers. Classified Ventures has the backing of four media companies in addition to Gannett: McClatchy Co, Tribune Media Co, AH Belo Corp and Graham Holdings Co.
Gannett shares were up 4.4 per cent to $34.32 yesterday, giving it a market value of about $7.7 billion. The shares were up as much as 9 per cent in after-hours trading.
Shares of McClatchy were up 21 per cent to $5.50 in late trading, while AH Belo rose about 3.8 percent. Tribune and Graham holdings remained unchanged.
The person added, under the deal, the four owners other than Gannett would have five-year agreements with Cars.com in which they would continue to sell advertising in their respective regions.
Reuters reported that Gannett had been buying broadcast TV stations to beef raise its portfolio against declining advertising revenue and newspaper readership.
It spent $1.5 billion on the acquisition of broadcaster Belo last year, which saw it nearly double its broadcast TV holdings to over 40 stations.
The deal would also add to Gannett's digital portfolio, which includes a stake in the recruitment website CareerBuilder.
