By: Jennifer Saba Goldman Sachs has weighed in on the Daily Mail and General Trust's failed auction of its Northcliffe properties in relation to the Knight Ridder sale.
In a report released today, the research firm states that Gannett -- widely cited in the press as a bidder in both Northcliffe and Knight Ridder -- will continue to exercise prudence when pursuing acquisitions. The thinking goes that since Gannett is out of the United Kingdom, it can now turn its full attention to Knight Ridder.
Based on press reports that bids for Northcliffe came in the range of 1.3 to 1.5 billion British pounds, Goldman Sachs figures it implies multiples of 13.8 to 14.8 times EBITDA: "If these reports are accurate, we are happy that Gannett did not 'win' this asset, as these valuations are very rich, even in the context of potential synergies.
"While Gannett has historically had a healthy appetite for acquisitions, it has consistently demonstrated a high degree of financial discipline on the acquisition front," the report stated. "Don't look for an aggressive bid for Knight Ridder from Gannett."
Goldman Sachs defines aggressive as 10 times EBITDA, or roughly $70 per share. As of this afternoon, Knight Ridder was trading down $.94 to $61.66.
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