By: Lucia Moses With Freedom Communications Inc. officially on the market, Gannett Co. Inc. is rising to the top of several speculators' lists of prospective buyers.
"It's got the best balance sheet right now, [Chairman, CEO, and President Douglas H.] McCorkindale wants to buy, the pieces fit," said Edward J. Atorino, newspaper analyst with Blaylock & Partners.
One of the last big private, family-owned newspaper companies, Freedom is expected to attract widespread interest. In addition to its crown jewel,
The Orange County Register in Santa Ana, the Irvine, Calif.-based company owns 27 other dailies, 37 weeklies, and eight TV stations.
"Very few properties of this size and excellence come on the market," said London-based broker Christopher Shaw, who knows of several newspaper companies willing to pay as much as $2.5 billion for Freedom. And, as Atorino noted, competition could drive up the price.
An offer from the Tribune Co. could raise antitrust concerns -- it owns a
Register neighbor, the
Los Angeles Times.
Atorino said neither Tribune nor Knight Ridder have strong enough balance sheets to make a Freedom-size deal.
Besides Tribune and Knight Ridder, analysts have named Advance Publications, the McClatchy Co., the New York Times Co., and News Corp. as possible buyers. Morgan Stanley will solicit bids for all or part of Freedom following its board's decision Thursday to explore a sale or merger. The process could take six to nine months.
CEO and President Alan Bell said the majority of the 80 or so shareholders voted to explore a sale or merger. A buyout by shareholders is still technically an option, but observers believe it's unlikely shareholders could raise the money to match a big company's offer.
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