By: Jennifer Saba
Wall Street was a bit surprised by Gannett’s announcement Wednesday that Craig Dubow would be filling the shoes of President and CEO Douglas McCorkindale.
Both Merrill Lynch and Prudential Equity issued notes late this week, which said that while the choice was unexpected, there is no real risk involved.
A successor to McCorkindale — who had already postponed his retirement once — was not readily apparent. According to Merrill Lynch, “there was no obvious internal candidate for the job,” and as a result, Gannett hired an executive-search firm last summer to help with the process. Ultimately, of course, the company settled on a insider.
Prudential noted that Dubow is “not well known to investors except in 15 minute presentations a couple of times a year.” However, the firm said that an internal candidate is a likely plus for the nation’s largest newspaper publisher.
Merrill Lynch said much the same: “Hiring a seasoned insider is probably the least risky move as there is unlikely to be temptation to try and fix something that isn’t broken.”
The two firms part ways when rating the company. Merrill Lynch maintains its “neutral” stamp, which has more to do with the firm’s lack of confidence regarding industry growth possibility in the face of declining circulation, weak ad trends, and loss of share.
Prudential is more bullish. The firm rated the company “overweight” because it feels that despite the current soggy environment, Gannett will be at the top of its peer group this year.