Billionaire investor Carl Icahn recently disclosed his 6.6%
Gannett Co., Inc.
) and indicated that he was in the favor of the split, which the
diversified media conglomerate announced in early August. The
activist investor hinted that his firm took a stake in the company,
as its shares were undervalued and believes that the decision to
split would help in unlocking value.
Gannett recently announced that it will split its business into
two separate entities, one completely focusing on Broadcasting and
Digital businesses and the other concentrating on Publishing. The
bold step is in line with the Tribune Company that spun off its
newspaper business into a publicly traded company Tribune
Publishing Company (
). News Corporation (
) and Time Warner Inc. (
) have also separated their broadcasting and digital properties
from the sluggish print business.
Gannett informed that following the split, the two companies
will remain headquartered in McLean, VA. While the Publishing
business will be christened as Gannett, the name of the
Broadcasting and Digital company is yet to be decided. Gracia
Martore will spearhead the Broadcasting and Digital company, while
Robert J. Dickey will serve as CEO of the Publishing company.
For quite some time now, Gannett has been making endeavors to
expand its presence in broadcasting and digital products with a
view to lower its dependency on the soft print media business as
well as traditional advertising and therefore reduce susceptibility
to economic conditions.
The recent news of Gannett taking over Cars.com underscores the
same. Prior to this, the company bought six television stations of
London Broadcasting Company and also acquired television-station
operator, Belo Corp. We believe this will transform Gannett's
business model, which was largely focused on low margin newspapers
to a high-margin multi-media business.
Apart from business model diversification initiatives to add
revenue streams and counter any economic onslaught, Gannett is
adapting to the evolving multi-platform media universe, which
currently includes the Internet, mobile, social media networks and
outdoor video advertising. The company is also realigning its cost
structure and streamlining operations to increase efficiencies.
Gannett currently holds a Zacks Rank #3 (Hold).
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