Journal Communications Shareholder Voices Displeasure With Merger Into Scripps
February 23, 2015 at 3:38 AM (PT)
There could be a speed bump in the proposed merger between E.W. SCRIPPS CO. and JOURNAL COMMUNICATIONS INC. The MILWAUKEE BUSINESS JOURNAL reports, "Major JOURNAL COMMUNICATIONS INC. shareholder MARIO GABELLI says he plans to abstain from voting or oppose the proposed combination of the MILWAUKEE-based media company with E.W. SCRIPPS CO. because JOURNAL shareholders will lack a voice on the SCRIPPS board of directors."
The deal announced last JULY (NET NEWS 7/31/2014) had the companies merging their broadcast operations and spinning off the companies' newspapers in a stock swap. JOURNAL's radio and television stations and SCRIPPS' television stations will be merged into CINCINNATI-based E.W. SCRIPPS CO., while the newspapers will merge into a new publicly-traded company, JOURNAL MEDIA GROUP. SCRIPPS' TIMOTHY E. STAUTBERG has been named CEO of JOURNAL MEDIA GROUP, while JOURNAL's STEVEN J. SMITH will be non-executive Chairman of JMG. RICHARD A. BOEHNE will remain Chairman, President, and CEO of SCRIPPS. SCRIPPS shareholders will own 69% of SCRIPPS and 59% of JOURNAL MEDIA GROUP, while JOURNAL COMMUNICATIONS shareholders will end up with 31% of SCRIPPS and 41% of JMG. SCRIPPS shareholders will also get a $60 million cash dividend.
The MILWAUKEE BUSINESS JOURNAL explains, "GABELLI, whose NEW YORK CITY-based investment funds hold 19% of JOURNAL COMMUNICATIONS stock, says he supports the economics of the transaction, but has a problem with the proposed corporate governance. GABELLI objects to the plan for no JOURNAL COMMUNICATIONS representation on the SCRIPPS board despite SCRIPPS gaining 35 radio stations and 15 television stations from MILWAUKEE-based JOURNAL BROADCAST GROUP."
The move by GABELLI isn't expected to stall the JOURNAL-SCRIPPS deal, as funds he controls holds just 19% of JOURNAL COMMUNICATIONS.