(USA Today) -- Shares of Gannett jumped about 4% Wednesday after the media company cleared a major hurdle in its quest to nearly double its TV business.
Dallas-based Belo said Wednesday that its shareholders voted in a special meeting to approve a deal for Gannett to acquire Belo for $13.75 a share - or about $1.5 billion in cash - and assume $715 million of Belo's debt. The deal needed a two-thirds majority of the votes to be approved.
Following the announcement of the vote result, Belo shares fell 0.58% to $13.72 in Wednesday afternoon trading. Shares of Gannett rose 3.9% to $26.76.
Belo issued the following statement: "Television company Belo Corp. held a special meeting of shareholders this morning at which shareholders voted in favor of the proposal to approve and adopt the merger agreement with Gannett Co. Inc. along with two other related proposals. The transaction is subject to certain regulatory approvals and other customary closing conditions. The company expects the transaction to close by the end of 2013."
Once completed, Gannett's TV station portfolio will jump from 23 to 43. The company, which owns USA TODAY, will become the fourth-largest owner of network TV affiliates in households reached, behind CBS, Fox Broadcasting and Sinclair Broadcast Group.
Some Belo shareholders have sought to solicit higher bids by attempting to block the proposed deal through lawsuits. But the vote on Wednesday ensures that Gannett will not have to compete with any other bids to complete its acquisition.
Last month, Gannett revealed in a filing with Securities and Exchange Commission that Belo and its directors were named as defendants in four class action lawsuits brought by and on behalf of shareholders who alleged that Belo's directors breached their fiduciary duties in connection with the merger.
Meanwhile, the companies are also waiting for approval by the U.S. Department of Justice. In August, the DOJ issued a "second request" for more information and documents from the companies for its review. Gannett said then that such requests are "a standard part" of the DOJ review process.
Only a small portion of proposed mergers and acquisitions are actively investigated by federal regulators. And about half of the investigated cases receive a second request for more information, according to data from the Justice Department.
Companies that engage in sizable acquisition deals -- an acquirer with at least $100 million in net sales buying at least $70 million in assets or shares of another - must file a report with the DOJ and the Federal Trade Commission.
Such reports - called Hart-Scott-Rodino (HSR) filings -- may trigger an investigation if regulators deem that a deal may have anti-competitive effects or potentially violate antitrust laws. The reports are required as part of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
In fiscal 2012, there were 1,429 HSR reports filed at the DOJ and the FTC. Of the total, the DOJ investigated 61 deals.
Data from the DOJ show that 29 of the 61 investigated cases received a second request. The DOJ eventually recommended that seven deals be nullified or amended.
The Gannett-Belo deal also requires approval from the Federal Communications Commission. Gannett is the parent company of 11Alive (WXIA) and MyAtlTV (WATL).
(USA Today)
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