By: E&P Staff Depressed valuations for metro dailies has pushed down the prices of small-market papers too much, the CEO of acquisitive community newspaper publisher GateHouse Media Inc. said Friday.
In a conference call with analysts after reporting first-quarter results, CEO Michael E. Reed said the market valuations of newspapers "has spilled too much into the small-market newspaper industry."
"What that means is there's a fantastic buying opportunity in that space," he said.
Reed stopped short of promising more acquisitions, but said the chain of more than 100 dailies would look at "opportunities that are accretive and good for shareholders."
He said the capital crunch -- and the rash of chains currently "exploring strategic interests" -- has neither increased nor decreased the number of papers up for sale.
"We see a consistent deal flow that is consistent with what we've seen over the past decade," he said. "What we are seeing is better value in that deal flow."
GateHouse is comfortably servicing its own large long-term debt, which stood at about $1.2 billion in the first quarter. He said its leverage ratio of about 6.3 times assets is in compliance with bank agreements.
Reed suggested GateHouse may use its free cash flow -- which dipped slightly on a same-store basis during the first quarter -- to buy back its slumping stock.
"Buying back shares for the rest of the year is extremely high on the list of priorities for us," he said.
GateHouse (NYSE: GHS) was $5.05 in mid-morning trading, off 5 cents, or 0.98%, from the opening. It has traded in a 52-week range of $4.50 to $20.58.
Comments
No comments on this item Please log in to comment by clicking here