GateHouse To Float Second Public Offering

By: Mark Fitzgerald

GateHouse Media Inc. plans to make a follow-on public offering of 17 million shares of common stock, partly to pay off $300 million in debt taken on for its recent purchases of dailies from Gannett Co. and The Copley Press, the big community newspaper publisher said in a U.S. Securities and Exchange Commission (SEC) filing.

GateHouse said the funds managed by its principal owner, Fortress Investment Group LLC, are not selling any shares in the offering. Fortress owns an approximately 60% stake in the Fairport, N.Y.-based publisher.

GateHouse said it has granted the underwriters of the offering an option to purchase as many as an additional 2. 55 million shares of common stock.

“We intend to use these net proceeds to repay in full the $300 million of borrowings under our Bridge Loan (including accrued and unpaid interest) incurred in connection with the Copley Acquisition and the Gannett Acquisition,” GateHouse said in its SEC filing.

In its registration statement, GateHouse said that as of March 31, 2007, that on a pro forma basis, with the bridge loan paid off, its total indebtedness would be $1.195 billion.

GateHouse lost about $13.3 million in the first quarter of the year, and $28.9 million in 2006.

GateHouse, formerly known as Liberty Group Publishing, went public in late October 2006 with an initial public offering of stock.

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