Belo to separate television, newspaper businesses

By Lisa Kerner

Charlotte, N.C., Oct. 1 - Belo Corp.'s board of directors unanimously approved the spinoff of the company's newspaper business into a publicly traded company called A.H. Belo Corp.

The move follows the board's review of "value creation strategies," according to a company news release.

Belo said it will accomplish the spinoff through a tax-free distribution of A.H. Belo shares to Belo shareholders, most likely in the first quarter of 2008.

A.H. Belo will own and operate the Dallas Morning News, the Providence Journal, the Press-Enterprise and various associated web sites, as well as certain niche products and direct mail and commercial printing businesses. These businesses currently have annual revenues of $750 million and about 3,800 employees, the release stated.

Belo chairman and chief executive officer Robert W. Decherd will become chairman, president and CEO of A.H. Belo and non-executive chairman of Belo. Dunia A. Shive, currently president and chief operating officer of Belo, will become Belo's president and CEO.

"The decision to create separate television and newspaper companies recognizes the profound yet distinct changes occurring in these industries and the appeal of the separate businesses to discrete investor groups," Decherd said in the release.

"This action should provide shareholders with greater insight into each business, while making each business more nimble and better able to allocate capital to compete and grow within its respective industry."

Decherd added that as a separate public company focused on newspapers and online news, the debt-free A.H. Belo "will be better able to respond to the diverse and rapidly evolving needs of customers in the local markets it serves" and will have "the financial flexibility to compete in this challenging operating environment and return cash to shareholders."

Following the spinoff, the companies will maintain two voting classes of common stock. A.H. Belo series A shares will have one vote per share and its series B shares will have 10 votes per share, the same as Belo's current series A and series B shares.

Current Belo directors J. McDonald Williams, Douglas G. Carlston, Louis E. Caldera, Dealey D. Herndon and Laurence E. Hirsch will be members of A.H. Belo's board. Decherd, Shive, James M. Moroney, III, and current Belo directors Herndon, Henry P. Becton, Jr., Judith L. Craven, Wayne R. Sanders, William T. Solomon, M. Anne Szostak and Lloyd D. Ward will be members of Belo's board.

A.H. Belo expects to pay an annual dividend of approximately $0.20 per share paid quarterly, while Belo intends to pay an annual dividend of about $0.30 per share, also paid quarterly.

Belo will keep all outstanding debt under its existing notes, debentures and credit facility, which totals about $1.2 billion.

A.H. Belo and Belo were advised by Goldman, Sachs & Co.

Belo is a publicly traded television station and media company based in Dallas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.