Gannett, which operates the Arizona Republic and Channel 12, said it reached a deal to buy TV station owner Belo, which operates Channel 3, for about $1.5 billion in cash, significantly boosting its presence in broadcasting.
Under the agreement announced Thursday, Gannett will pay $13.75 per share for the TV station operator, which is based in Dallas. That represents a 28 percent premium over Belo’s closing price on Wednesday.
Gannett, the largest U.S. newspaper publisher by circulation, also will assume $715 million in debt. Gannett owns USA Today and other newspapers as well as television stations.
Shares of both companies soared to their highest prices since 2008. In afternoon trading, Belo Corp.’s shares jumped $2.91, or 27 percent, to $13.64, after peaking at $13.69 shortly after the market opened. Gannett Co.’s stock rose $5.61, or 28 percent, to $25.46 after peaking at $25.69.
Gannett President and CEO Gracia Martore called the acquisition an “important step” in Gannett’s diversification and said it will significantly improve the company’s cash flow and financial strength.