Original Story: usatoday.com
Gannett, the media company that owns USA TODAY, Cars.com and local TV stations and newspapers, said Thursday the planned split of its main business units into two separate companies will result in higher dividends and more shares bought by the post-split entities.
Last year, the McLean, Va.-based company said it plans to continue to operate its broadcasting and digital businesses and change the name after the split, an effort to shield the growing units from the decline in print advertising. The newspaper division, which consists of USA TODAY and 81 other daily newspapers, will be spun off as a separate, publicly traded company and will retain the name Gannett. Current Gannett shareholders will receive shares of both companies, based on the final distribution ratio.
In a filing with the Securities and Exchange Commission Thursday, Gannett said the publishing company expects to pay a regular cash dividend of 32 cents per share annually, subject to adjustment based on the final share distribution ratio. It also plans to buy up to $150 million of its shares, expected to be completed in a three-year period.
The broadcasting/digital company, which owns Cars.com, CareerBuilder.com and operates or provides services to 46 stations, is expected to pay a regular cash dividend of 56 cents per share annually.
When combined, the dividends planned by both companies represent a 10% increase over Gannett's current dividend, the company said.
The broadcasting/digital company plans to replace Gannett's current share buyback program with a new $750 million program that will be used over the three-year period after the separation. When the share buyback plans of both companies are combined, they represent "more than a doubling of the current Gannett share repurchase program," the company said.
"Under the current plan, both companies will have leverage levels well below peer companies and will maintain the flexibility to adjust repurchases based on business conditions, new opportunities, and other factors," Gannett said in a statement.
The planned separation, which will be handled through a tax-free dividend of shares in the publishing company to current Gannett shareholders, "is on track to be completed in mid-2015," the company said.
"The filing of the registration statement for the publishing business is a key step forward in completing our separation," said Gannett CEO Gracia Martore, who will remain as CEO of the post-split broadcasting/digital company. "Each company will have a robust capital allocation plan reflective of its strong positioning, and together their expected dividend and share repurchase programs will be larger than Gannett's today."