Gannett bidder New Media turns to alternative lenders

31 July 2019 - 12:00 am UTC

New Media Investment Group [NYSE:NEWM] is in talks to use alternative lenders to raise debt financing to back its cash-and-stock bid to acquire Gannett [NYSE:GCI], two sources familiar with the situation said.
Earlier this month, the Wall Street Journal reported that New Media, which owns GateHouse Media, was near a deal to acquire fellow newspaper publisher Gannett. The negotiations followed McLean, Virginia-based Gannet’s rejection earlier this year of a USD 12 per share offer from MNG Enterprises, also known as Digital First Media.
Regional and local newspaper publishers like Gannett and GateHouse have been struggling with years of declining circulation and advertising rates, prompting talk of consolidation. Gannett’s stock currently is trading at USD 10.24 compared to close to USD 15 five years ago.
Credit Suisse is advising New Media on its bid for Gannett, publisher of USA Today, the two sources said. Most traditional banks, both sources said, are not comfortable with offering the flexible debt financing terms New Media has been seeking for the transaction.
The bidder, externally managed by financial sponsor Fortress Investment Group, has been looking to raise USD 1.5bn to USD 1.6bn in debt financing and could issue equity up to around 49% of the pro-forma company, the sources added.
Fortress, Tribune, Gannett and Credit Suisse  declined comment. New Media did not respond to request for comment.
by Bhavna Kaul with additional reporting by Jonathan Guilford