May 4, 2017 Last Updated 4:49 pm

TEGNA to spinoff, will hold investor meeting May 16

The broadcast company, created with its spin-off from the newspaper side of Gannett (which retained the Gannett name), will now spin-off one of its digital media assets

The broadcast company TEGNA yesterday announced that it would be spinning off its digital media property, and today set a date (May 16) for an investor meeting in NYC. The spin is expected to be completed on May 31, 2017.

A little background: TEGNA is the new company formed by the splitting up of the old Gannett. The broadcast side became TEGNA, and the newspaper side remained named as Gannett. The CEO of Gannett, Gracia Martore, then became the CEO of TEGNA. If that wasn’t a big enough sign that the broadcast side was the place to be, the other big decision was that the digital publishing assets and CareerBuilder went not with the print publishing side of the split, but with the broadcast side.

As I wrote in 2015, this really hamstrung the newspaper company that would remain as Gannett:

Like the Tribune Company spin-off, the new newspaper company will be forced into agreements with the digital assets that will go to the broadcast side: CareerBuilder, and G/O Digital. As a result, the newspaper will actually be driving digital growth for the broadcast company, while having their hands tied as to new digital initiatives.

Everyone could see that this was a terrible thing to do to Gannett.

“We expect TEGNA to benefit from acquisitions as well as increased contribution from and CareerBuilder,” wrote Joe Cornell for Forbes. “On the other hand, Gannett Co. operates the less promising publishing business with declining traditional print advertising revenues. We have revised downwards our target price for Gannett Co. to $15.60 per share (earlier $17.25) implying a 10% upside from the current price of $14.13 per share and downgrade our rating on the stock to Hold.”

Gannett’s stock did fall a little after the spin-off, but then rose to $17.91 at the end of November 2015. It didn’t last. Today it is trading at $8.40, down 5 percent today, likely due to the stories coming out about layoffs at its local newspapers.

As for TEGNA, now it gets to spin-off another company, something that generally proves quite profitable for both the top executives and the shareholders.

As for those who work at what happens to the new company determined by the conditions set for the spin-off — and the signs are not good. From the release see in full below:

“Prior to the separation, will make a one-time cash distribution of $650 million to TEGNA. expects to enter into new credit facilities with borrowing capacity of approximately $900 million and expects a portion of the facilities will remain undrawn at closing.”

It is actually shocking that TEGNA shares (TGNA) are not climbing today after the details of the spin-off were made public, especially since TEGNA said (also below) that it would use its $650 million windfall in a stock repurchase initiative, which also should boost the stock.

Here is the announcement for the spin-off:

MCLEAN, Va.— May 3, 2017 — TEGNA Inc. today announced that its Board of Directors has approved the previously announced spin-off of, which will create two publicly traded companies: TEGNA, an innovative media company with the largest broadcast group among major network affiliates in the top 25 markets; and, a leading digital automotive marketplace.

The spin-off will be effected through a pro rata distribution of all outstanding shares of to TEGNA stockholders of record at the close of business on May 18, 2017 (the “Record Date”). Stockholders will retain their TEGNA shares and receive one share of for every three shares of TEGNA stock they own on the Record Date. shares are expected to begin “regular way” trading on June 1, 2017. The spin-off remains subject to the conditions described in the preliminary information statement filed by on Form 10 with the U.S. Securities and Exchange Commission.

Gracia Martore, President and CEO of TEGNA, who will retire upon the closing of the spin-off, said, “Today’s milestone brings us one step closer to creating two industry-leading companies with the right focus, resources and leadership to capture the unique opportunities in each of their rapidly evolving industries. This spin-off is the culmination of a multi-year transformation of our company, and the Board is confident that both companies are well positioned to execute their strategic plans for growth and create shareholder value.”

Dave Lougee, who will serve as President and CEO of TEGNA upon completion of the separation, added, “I am honored to lead TEGNA into the future at such a pivotal time for our company. With our strong capital structure, we are well-positioned to take advantage of current and future regulatory changes. We will continue TEGNA’s history of serving our local communities by creating and distributing innovative and compelling content across a wide range of platforms and by providing our clients marketing tools and services to enable them to succeed in the digital age.”

Alex Vetter, who will serve as President and CEO of upon completion of the separation, said, “We are approaching a watershed moment for and I couldn’t be more excited about our future. As an independent company, we have greater flexibility to capture the opportunities ahead of us by leveraging our strong brand, innovative platform and expanding, loyal audience. We are a pure-play digital company in an excellent position to drive long-term growth and profitability, and we are a unique investment opportunity in the digital automotive space.”

Upon completion of the separation, TEGNA will continue to trade on the New York Stock Exchangeunder the ticker symbol TGNA and will trade regular way on the New York Stock Exchangeunder the symbol CARS. Holders of TEGNA common stock who sell TEGNA shares regular way on or before May 31, 2017 will also be selling their right to receive shares of common stock in the distribution. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling TEGNA common stock before the distribution date.

John A. (Jack) Williams, President of TEGNA Digital, will retire upon the closing of the spin-off. Ms. Martore added, “Jack joined the company 22 years ago and has been instrumental in leading our Digital portfolio since 2008. I want to thank Jack for all that he has done for this company and wish him well in his retirement.”

Capital Structure

Prior to the separation, will make a one-time cash distribution of $650 million to TEGNA. expects to enter into new credit facilities with borrowing capacity of approximately $900 million and expects a portion of the facilities will remain undrawn at closing. It intends to invest in organic growth initiatives and selective acquisitions to create shareholder value and does not anticipate paying a cash dividend.

It is expected that TEGNA’s existing credit facility will remain in place following the transaction, and the company expects to target long-term leverage levels in line with its peers. The company intends to use the $650 million tax free distribution from and cash flow from operations to reduce leverage and, to that end, will extinguish its current share repurchase program, with plans to reassess in the future. TEGNA expects to pay a regular cash dividend of $0.28 per share annually. The company intends to continue investing in organic and strategic growth opportunities and also intends to maintain the financial flexibility to pursue strategic acquisitions when appropriate.

TEGNA Board of Directors

Current TEGNA Board Chairman Marjorie Magner will continue to serve as chairman of TEGNA’s Board of Directors following the separation and will be joined by Dave Lougee, who will be TEGNA’s president and CEO following the separation. TEGNA’s Board of Directors will also include current TEGNA directors Jennifer Dulski, Howard D. Elias, Lidia Fonseca, Scott K. McCune, Henry W. McGee, Susan Ness, Bruce P. Nolop and Neal Shapiro. Board of Directors

Scott Forbes will serve as chairman of the Board of Directors following the separation. The Board of Directors will also include Alex Vetter, President and CEO, and current TEGNA director Jill Greenthal. In addition, upon completion of the separation, Thomas Hale, Donald McGovern and Greg Revelle are expected to serve on the Board of Directors. Ms. Greenthal will resign from the TEGNA Board concurrently with the completion of the spin-off. Director Biographies

Scott Forbes

Scott Forbes, an experienced non-executive director, currently serves as Chairman of two LSE-listed companies: Rightmove, the UK’s number one online real estate company, and Ascential, an international business to business media company. Scott is a member of the Board of Directors ofTravelport Limited and was previously Chairman of Orbitz Worldwide until its sale to Expedia in September 2015. Scott has over 35 years of experience in operations, finance and mergers and acquisitions, including 15 years at Cendant, which was formerly a leading provider of travel and real estate services. He established Cendant’s international headquarters in London in 1999 and led this division as Group Managing Director until he joined Rightmove in 2005.

T. Alex Vetter

T. Alex Vetter will serve as the President and Chief Executive Officer of Alex has served as President and Chief Executive Officer of, LLC since 2014. As one of the original members of management, Alex has helped shape the company from its initial concept into a leading digital automotive marketplace, steering the organization’s growth strategy while serving in a variety of executive roles spanning product development, customer service, training, operations and sales, since the launch of in 1998. From 2006 until his elevation to President and Chief Executive Officer in 2014, Alex served in a variety of senior management roles for LLC, from Senior Vice President, Sales to Executive Vice President and Chief Operating Officer. Alex is an active technology investor and advisor, helping entrepreneurs and companies transition from seed or growth stage with scale. He currently serves as a member of the Board of Directors of RepairPal, and is on the advisory boards of several technology ventures, including Shotfarm and Earshot.

Jill Greenthal

Jill Greenthal has been a Senior Advisor in the Private Equity Group of The Blackstone Group, a global asset management firm. She previously was a Senior Managing Director in Blackstone’s Advisory Group. Prior to joining Blackstone, Jill was Co-Head of the Global Media Investment Banking Group, a Member of the Executive Board of Investment Banking, and Co-Head of the Bostonoffice of Credit Suisse First Boston, an Investment Bank. Jill currently serves on the Board of Directors of TEGNA (from which she will resign when she joins the Board of Directors of, Akamai Technologies, Houghton Mifflin Harcourt, and The Weather Channel. She previously served as a director of Michaels Stores and Orbitz Worldwide.

Thomas Hale

Tom Hale is President of SurveyMonkey, the world’s largest online survey company. Before joining SurveyMonkey, he was Chief Operating Officer of HomeAway, an internet marketplace for vacation rentals. Prior to HomeAway, Tom served as Linden Lab’s Chief Product Officer, where he redesigned the consumer experience of Second Life. During his twelve years at Macromedia and Adobe, he held several executive roles in general management, product management, and marketing, most notably building out each company’s developer and knowledge worker strategies. Following the acquisition of Macromedia by Adobe, he was responsible for the Acrobat family of products, including the revamped user experience for Acrobat and integration of the real-time collaboration tool Adobe Connect. Tom was previously a member of the Board of Directors of ReachLocal, a public business to business digital marketing services firm and of Intralinks, a public global technology provider of enterprise content management solutions.

Donald A. McGovern, Jr.

Donald A. McGovern, Jr. has more than 40 years of financial and accounting experience, retiring from PricewaterhouseCoopers (PwC) in June 2013, following a 39-year career with the firm. During his time at PwC, he was Vice Chairman, Global Assurance, directed the US firm’s services for several large public company clients and was involved in over 30 Silicon Valley IPOs. He also held various other leadership roles in PwC and was, from July 2001 to June 2008, a member of, and past lead director for, the Board of Partners and Principals of the U.S. firm, as well as a member of PwC’s Global Board. Don currently serves as Senior Independent Director and Chair of the Remuneration Committee on the Board of Directors of CRH, and a Director and Chair of the Audit Committee of two private companies, Neuraltus Pharmaceuticals and eASIC Corporation. He is a member of the American Institute of Certified Public Accountants.

Greg Revelle

Greg Revelle is the Chief Marketing Officer for Kohl’s, responsible for the marketing organization and overall marketing strategy, including the company’s focus on driving customer engagement through analytics, enhancing the loyalty platform, accelerating customer traffic and continuing to build Kohl’s overall brand position. Prior to joining Kohl’s, Greg was the Chief Marketing Officer at Best Buy, responsible for marketing, customer strategy, brand positioning and execution across all channels and customer touch points. He led efforts to redefine Best Buy’s brand positioning and customer strategy, championed a shift to digital and personalized customer communications, developed sophisticated analytics capabilities and drove significant growth in the company’s loyalty program. Prior to Best Buy, Greg served as Chief Marketing Officer at AutoNation. Before that, he was Vice President of worldwide online marketing at Expedia and an investment banker at Credit Suisse.


Greenhill & Co. is acting as financial advisor on the separation transaction and Wachtell, Lipton, Rosen & Katz is acting as legal advisor.

Comments are closed.