Gannett Co. (GCI) and Belo Corp. (BLC) said they reached a
preliminary agreement with the Justice Department related to a St.
Louis television station that is expected to allow the pending $1.5
billion acquisition of the television broadcaster to proceed.
The Justice Department on Monday said it would require Gannett
and a third-party Sander Media LLC to divest themselves of
interests in St. Louis television station KMOV-TV owing to
antitrust concerns before the Belo acquisition could move
ahead.
Under the planned deal, Sander Media had been set to acquire six
Belo television stations that Gannett can't hold under Federal
Communications Commission rules, including KMOV-TV.
The Justice Department on Monday had said that its antitrust
division filed a civil suit to block the Belo acquisition and
related agreements between Gannett and Sander. The suit alleged
that the planned transaction would hurt competition in the
broadcast TV spot advertising market in the St. Louis area. The
complaint alleged that though KMOV-TV and Gannett's KSDK TV would
have separate sales forces under the deal, various agreements
between Gannett and Sander "would align the incentives of the two
stations."
The companies announced in June that Gannett would buy Belo,
with its 20 stations, for $13.75 a share.
In a statement Monday, Gannett said it expects very minimal
impacts on its outlook for cost savings related to the Belo
deal.
Gannett shares were trading at $26.71 recently, up 2%. Belo
shares were at $13.73, up three cents.
Write to Tess Stynes at tess.stynes@wsj.com
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