Gannett pays $1.8bn to take over the wheel at Cars.com
Gannet, the owner of USA Today and America’s largest newspaper publisher, is reportedly set to buy out the other companies that own Cars.com for $1.8bn in a deal that could be announced today, according to Bloomberg.
Cars.com: Gannett takes over
Gannett already owns about 27 per cent of the car-sales website, so the deal values the whole business at about $2.5bn.
Cars.com is owned by Classified Ventures, a joint venture of Gannett and four other newspaper and former newspaper companies: McClatchy, Tribune Media, A.H. Belo and Graham Holdings.
Jeremy Gaines, a spokesman for Gannett, declined to comment, while a representative for Classified Ventures, who own Cars.com, couldn’t immediately be reached by Bloomberg for comment.
Cars.com, which was started in 1998, lets users check prices, compare models and read reviews of car dealers.
Gannett rose 4.4 per cent to $34.32 yesterday giving it a market value of about $7.7bn. The shares went up as much as 9 per cent in after-hours trading.
Bloomberg pointed out that newspaper classified advertising had been hard hit, dropping by more than half between 2000 and 2008 to $9.9bn.
For Gannett, acquiring Cars.com would "fill some of the holes left by diminished revenues from classified advertising in its print publications. "
Gannett also holds a majority stake in a venture with Tribune, McClatchy and Microsoft that owns job-hunting site CareerBuilder.