Belo to spin off newspaper business
EmptyDALLAS -- Television station owner Belo Corp. plans to spin off its newspaper business which includes The Dallas Morning News into a separate publicly traded company.
Belo shares rose nearly 5% in premarket trading after Monday's announcement.
The new company would be called A.H. Belo Corp., the name the company bore from 1865 until 2001. Belo's current chief executive, Robert Decherd, will become CEO of the newspaper company.
In addition to the Dallas newspaper, the new company will own and operate newspapers including The Providence Journal and The Press-Enterprise of Riverside, Calif.
It will also own and manage the Web sites associated with the properties, along with certain niche products and direct mail and commercial printing businesses, according to a company statement.
The operations to be spun off currently have annual revenues of about $750 million and approximately 3,800 workers.
The newspaper spinoff will leave Belo Corp. with 20 television stations and two regional cable news channels. That company would have about 3,200 employees and revenue of more than $750 million.
The spin-off would be made through a tax-free distribution of A.H. Belo shares to current Belo shareholders in early 2008.
The spinoff is expected to be completed in the first quarter of 2008.
Current Belo Chairman and CEO Decherd will become chairman, president and CEO of the newspaper company A.H. Belo, as well as non-executive chairman of the television company Belo Corp.
Current Belo President and Chief Operating Officer Dunia Shive will become president and CEO of the television company after the separation.
Both A.H. Belo and Belo Corp. will remain Dallas-based and have two voting classes of common stock after the spinoff.
The newspaper company A.H. Belo Series A shares will have one vote per share, while Series B stock will have 10 votes per share. The television company Belo Corp. Series A and Series B shares already have that structure.
After the spinoff, A.H. Belo plans to pay an annual dividend of about 20 cents per share in quarterly increments, while Belo Corp. plans to pay an annual dividend of approximately 30 cents per share quarterly.
A.H. Belo will be debt-free when the spinoff is complete, Belo Corp. said. The ticker symbol for A.H. Belo has yet to be determined.
Belo shares rose 86 cents to $18.22 in premarket trading Monday.