Bear Stearns: Is Gannett Next?

By: Jennifer Saba Is Gannett bracing for a sale? Bear Stearns Alexia Quadrani points to a curious action revealed in Gannett's 10Q report filed this week. Gannett amended its executive compensation plans in case there was a change in ownership, Quadrani wrote in a note released today.

In the filing, Gannett clarified the definition of change in control, provided for the payment of accrued benefit amounts in a lump sum, provided for an accelerated vesting of retirement benefits, and prohibited a termination or a benefit reducing amendment to its retirement plan.

Gannett revealed it made the moves to align the company with industry trends and IRS rules.

Gannett is one of the few newspaper companies left with a single class of stock making it somewhat venerable to a takeover. Though its market cap is high, around $11.2 billion, the company's stock is down 20% year-to-date.

Quadrani is somewhat skeptical that Gannett will go on the block mainly due to a lack of interest from strategic buyers in past auctions and concerns by private equity players about the sector. Bear Stearns though recently raised it rating on Gannett to "outperform" because analysts believed the stock was trading at a discount.

"While again we reiterate that there may still be a drought in potential acquirers in this industry, a possible sale is just one of several reasons we would recommend this stock," Quadrani wrote.

As of late morning Gannett shares are trading down $2.07 to $45.27.


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