LSC, Quad/Graphics abandon $1.4 billion merger after U.S. antitrust suit

“WASHINGTON (Reuters) – LSC Communications Inc (LKSD.N) and Quad/Graphics (QUAD.N) terminated their $1.4 billion merger on Tuesday, a month after the U.S. Justice Department filed a lawsuit to block the deal, sending LSC shares down 36% to a record low.
Shares of LSC were down to $2.22 in heavy trading, while Quad/Graphics shares were up 7.9% at $8.20.

Quad/Graphics had said in October it would buy LSC Communications in an all-stock deal, bringing together two of the biggest companies that print books, magazines and catalogs.

“This result is a victory for American consumers and publishers, and a testament to the Division’s resolve to enforce the antitrust laws,” Assistant Attorney General Makan Delrahim, who heads the Justice Department’s antitrust division, said in a statement.

“Had this merger gone forward, it would have harmed competition that benefits publishers, retailers, and, ultimately, consumers through lower prices and greater availability of printed products from popular books to grade school textbooks.”

Wisconsin-based Quad/Graphics had revenue of $4.2 billion in 2018, while LSC Communications Inc, which was spun off by printing firm R.R. Donnelley in 2016, had revenues of $3.8 billion last year.

“We disagree with the DoJ’s conclusion regarding our transaction, especially in the context of industry trends,” LSC Chief Executive Officer Thomas Quinlan said.

Quinlan said the companies decided to terminate the deal because of the cost and time involved in challenging the Department of Justice.

The Justice Department had said the two companies were each other’s biggest rivals, citing internal documents that refer to a price war and a “two-horse race between LSC and Quad.”

In its complaint, filed in federal court in Illinois, the Justice Department had said Quad and LSC were the only realistic option for many publishers because of their complex printing equipment.

It cited at least one bidding war between the two that resulted in the offer of a $10 million signing bonus.

Quad/Graphics said it will pay LSC a reverse termination fee of $45 million while LSC Communications said it would suspend its quarterly dividend in order to bring down its debt and fund its restructuring programs.

LSC said suspending the dividend will allow the company to redeploy about $35 million in cash annually.

LSC also cut its full-year sales forecast as well as its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) forecast range due to a drop in demand in its magazines, catalogs and logistics segment.”

Source: Reuters, 2019

Ogden Newspapers buying two Ohio papers

“Ogden Newspapers is buying the Norwalk Reflector and the Sandusky Register, the Register reported.

Ogden will buy the two Ohio newspapers from Sandusky Newspapers, a family company. The sale is expected to close in late July, the Register said.

“We’re thrilled to have the opportunity to inherit the legacy of their impressive work, and we look forward to publishing great community-focused newspapers and running vital media platforms to serve a region as important as Sandusky and Norwalk, home to destinations such as Lake Erie and Cedar Point,” said Ogden Newspapers CEO Robert Nutting.

“We’re fortunate to be able to turn the papers over to another family company, owned by the Nutting family, who have demonstrated a record of editorial independence and local emphasis, and have a long-standing commitment to quality community journalism,” said David Rau, CEO of Sandusky Newspapers.

Ogden Newspapers is based in Wheeling, West Virginia.”

Source: News&Tech, 2019

Pittsburgh Post-Gazette cutting print editions

“The Pittsburgh Post-Gazette is reducing its print edition to three days from five, according to newsroom sources, the Philadelphia Inquirer and others reported.

A memo given to staff said the print paper would be produced only for Wednesday, Friday and Sunday editions, newsroom sources said, the Inquirer reported. The new schedule will start at the end of September, the Inquirer said.

In June 2018 the paper had announced its decision to become a digital new organization.

Family company Block Communications owns the paper.”

Source: News&Tech, 2019

 

Houston Chronicle begins magazine delivery with Doorfront Direct

“The Houston Chronicle has begun magazine delivery through magazine and catalog delivery network Doorfront Direct.

Houston is the 39th market to join Doorfront Direct, which through its affiliates delivers more than 750,000 magazines across the country each month, according to the company.

“As we look to the future of our delivery operation, it’s important that we diversify and expand the services we offer,” said Mike Houser, vice president of distribution for the Houston Chronicle. “Delivering national monthly magazines to our local market is a logical next step in this evolution. The service provides an additional revenue stream for carriers and increases route profitability.”

As an affiliate of Doorfront Direct, the Houston Chronicle is delivering national monthly magazines to local readers with their home-delivery carrier force, the same independent contractors who deliver the daily paper.

Doorfront Direct is a partnership of Gannett Publishing Services, Quad and ACI Last Mile Network.

Hearst Newspapers owns the Chronicle.”

Source: News&Tech, 2019

Meredith, New York Times Co. to produce special edition magazines

“Meredith Corporation’s Special Interest Media Group and The New York Times Company are introducing a series of Times-branded special edition publications that will be available at Meredith’s Magazine Store, Amazon and on retail newsstands nationwide beginning July 26.

The inaugural “Summer of ’69” issue will coincide with The New York Times coverage of the 50-year anniversary of that summer. As part of the collaboration, there are plans for five subsequent issues devoted to other historical events, significant milestones and cultural subjects, according to the Times.

“Combining the extraordinary, authoritative content from The New York Times with our broad scale and retail expertise is an unbeatable combination in the marketplace,” said Doug Olson, president, Meredith Magazines. “We’re thrilled to be collaborating with the Times on this first-ever collaboration that will expand our premium content offerings for a new and existing passionate group of readers.”

The venture marks The New York Times’ first standalone magazine on newsstands. The issues will each have a retail price of approximately $14.99.”

Source: News&Tech, 2019

Merger talks ongoing between Gannett, GateHouse

“Gannett and GateHouse are well into negotiations to merge, USA Today, the New York Post and others reported.

USA Today is Gannett’s flagship publication. Gannett also owns over 100 local news outlets in the U.S.

Gannett and GateHouse are the two biggest newspaper companies by circulation.

The financial details of a possible deal have not been made public, USA Today reported. Both companies declined to comment on the possible deal, USA Today said.

One sticky wicket may be GateHouse/New Media’s taking over of Gannett’s pension liabilities, according to a source, the Post reported.

New York state-based GateHouse Media is part of New Media Investment Group, which is managed by Fortress Investment Group, owned by Japanese company SoftBank. GateHouse owns 156 dailies.

Gannett recently rejected a takeover move by MNG Enterprises. Besides the possible GateHouse deal, Gannett may be looking at other arrangements, including with Tribune Publishing Co., USA Today said.

Gannett has not announced a new CEO since the recent retirement of CEO Robert Dickey.”

Source: News&Tech, 2019