Shares of Media General, Inc. (MEG: Quote) rose nearly 5 percent in extended trading on Wednesday after the media communications company said its is exploring the potential sale of its printed newspaper operations. The company added there can be no assurance that any transaction will take place, and provided no definitive timetable for the completion of the evaluation process.
The company revealed that investment banking advisory firm Peter J. Solomon Co. is assisting it with the strategic evaluation process. It also confirmed the receipt of inquiries from several potential parties regarding the purchase of certain of its print assets, without naming anyone.
The move follows the company's recent revelation that it is considering asset sales in order to reduce long-term outstanding debt of about $650 million over time. However, it will sell the assets only if the valuation reflects the the strength of its properties, and maximizes shareholder value.
The move is also in line with the company's said target of transforming itself over time to a digital media model as more and more newspaper owners see an ongoing decline in print media advertising revenue.
In a similar move in early January, the New York Times Co. (NYT: Quote) completed the sale of its Regional Media Group Halifax Media Holdings LLC, consisting of 16 regional newspapers, for $143 million in cash as it transforms to a digitally-focused, multi-platform media company.
Media General's operations include 18 network-affiliated television stations and their associated websites as well as 23 daily newspapers and their associated websites. Its newspaper brands are the leading print products in their core markets, including Richmond Times-Dispatch, the Winston-Salem Journal, and the Tampa Tribune.
The company noted that the valuations of local media properties in recent merger and acquisition transactions, including local newspapers, have reflected the strong market positions of the entities being sold.
MEG closed Wednesday's regular trading session at $5.01, down $0.04 or 0.79% on a volume of 56,511 shares.
by RTT Staff Writer
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