Following a special meeting of Belo (NYSE: BLC) shareholders, the TV company announced Wednesday its acquisition by media company Gannett (NYSE:GCI) had been approved. It needed two-thirds of the shareholders to approve the deal, but with Belo's directors and executive officers collectively owning about 42% of the company's stock, and agreeing to vote in favor of the merger, the hurdle was much lower to cross.
Under the terms of the deal, Gannett will acquire Belo for $13.75 a share, or about $1.5 billion in cash, and will assume $715 million of the TV-company's debt. The deal assigned an enterprise value on Belo of approximately $2.2 billion, and implied an average multiple of 9.4 times its 2011-2012 EBITDA prior to expected synergies or 5.4 times assuming them.
As a result of the approval, Gannett's current TV portfolio will nearly double from 23 to 43 stations, with its Broadcast segment having greater geographic and revenue diversity. Twenty-one stations are in the top 25 markets, and will become the No. 1 CBS affiliate group, the No. 4 ABC affiliate group, and will expand its already No. 1 NBC affiliate group position.
Gannett anticipates that the merger will generate approximately $175 million in annual synergies within three years after closing. The deal is still subject to certain regulatory approvals and other customary closing conditions, but it expects the transaction will close by the end of 2013.