Last Friday, Gannett and Belo put out this press release to announce that they had received requests for more information on the acquisition of Belo, which was announced on June 13. Being a long-time journalist, I’m always looking for press releases that massage the truth and this one looked like a winner.
That’s because the second sentence of the release said this: “A Second Request is a standard part of the DOJ review process.” Not so surprisingly, the few media outlets that reported on this news repeated the use of Gannett and Belo’s language (see this Dallas News piece for example). USAToday, which did a bit more reporting, didn’t use the word standard, but it did describe the second requests as “fairly common” before contradicting itself further into the piece and noting that only 29 deals (out of 1,429) had received second requests from the Department of Justice in fiscal 2012.
We couldn’t find our own stats for the number of second requests online, so we’ll just go with USA Today’s number. A regular footnoted reader pointed us to this annual report on the FTC’s site, which has some good stats. A chart on page 7 shows that fewer than 4% of all transactions result in second requests from either the DOJ or the Federal Trade Commission. Another chart on pg. 24 has somewhat different stats and shows that the number of second requests made by the DOJ has been hovering around 2% for the past few years. What we do know is that “second requests” aren’t exactly standard, at least based on our search of SEC filings for the past year. We did find this page on the FTC site which also gives some perspective on just how un-standard second requests really are. Here’s the key sentence:
“The vast majority of deals reviewed by the FTC and the Department of Justice are allowed to proceed after the first, preliminary review.”
Then again, given how much both Belo and Gannett’s stock rose following the June 13 announcement, you can see why there was an attempt to make the second request seem routine.