Gannett shares leap pre-market on spin-off news

USA TODAY - Pre-market shares in Gannett leaped over 7% on Tuesday after the media group — which owns USA TODAY, publisher of this report — said it would spin off its publishing unit into a separate company.Ahead of Wall Street's opening bell, Gannett shares were trading at $36.70, giving it a market capitalization of around $7.7 billion.

Those gains follow a rise of over 4% Monday on news — confirmed Tuesday — that Gannett will purchase the shares it does not already own in in a deal valued at $1.8 billion.

Gannett shares have seen major gains since bottoming out in 2009 at a low of $2.14 per share.

Tuesday's trading level puts the stock back at a price not seen since 2008.

Analysts at JPMorgan Chase & Co. in a recent research note said they have a $36.00 price target on the stock.

The new publishing unit will retain the Gannett name. Robert J. Dickey, currently president of Gannett's U.S. Community Publishing division, will become the unit's new chief executive officer.

Current Gannett CEO Gracia Martore will serve as CEO of a second company that will focus on broadcasting and digital businesses.

Time Warner, News Corp. and Tribune Co. have all made similar moves to separate parts of their respective businesses recently.



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