When Gannett announced several weeks ago that it was buying Belo Corp. in a $1.5 billion deal, there were lots of smiles and huzzahs, not to mention a sharp increase in both company’s stock prices — something that rarely happens to the company doing the acquiring.
The long embattled Gannett saw its stock hit a five-year high following the announcement on June 13. As this Dealbook story explains, the idea of more consolidation of local TV stations was the driving factor. Meanwhile, this WSJ story looks at the girl-power that got the deal done. Given all the media attention paid to this deal — journalists are known for spending an unusual amount of time in self-examination — we were eagerly awaiting the merger proxy.
The 167-page tome arrived late yesterday and we immediately turned to our two favorite parts of any merger proxy: the conflicts of interest and the background of the deal. The conflicts section — in this filing, it’s called “Interests of the Company’s Directors and Executive Officers in the Merger” — starts on pg. 39 and goes on to spell out exactly what Belo’s top executives will receive. For CEO Dunia Shive, the estimated payout is just over $14 million. That number includes $4.5 million in cash severance and another $3.3 million in tax gross-ups. Belo’s other three top executives will each receive between $4 and $5 million.
As for the background, the filing notes that Belo and Gannett first started talking last summer, but that it took until April 27 of this year for Gannett to make an offer of $12.50 a share. Over the next two months, Gannett gradually increased its offer to $13.75, in part because another company — identified only as Broadcaster A in the filing — had also expressed some interest. But Belo backed away when that company said it would take six to eight weeks to put a deal together.
While the Background section of the filing is always written in as boring and legalistic of a way as possible, it’s still usually a pretty good read. I’m not the only fan. As we’ve footnoted before, it’s Warren Buffett’s favorite part of the merger proxy too!
While lots of people are on vacation this week and markets are set to close at 1 pm est on Wednesday, the SEC, and specifically EDGAR, remains open for business until 5:30 pm on Wednesday and again all day on Friday. We’re expecting some interesting disclosures to find their way to the dump and we’ll be posting those for footnotedPro subscribers.