September 3, 2008 § 1 Comment
Reuters is reporting that Gannett has purchased another 10% of CareerBuilder from the Tribune Company for $135M at a $1.35B valuation. The last time CareerBuilder was valued publicly was in ’06 when Gannett and Tribune bought a chunk of CareerBuilder from McClatchy at a $1.55B valuation. That’s a $200M loss in value over the last 2 years. Compete shows a 16% decrease in CareerBuilder’s traffic over the last year. This must have been an interesting negotiation because CareerBuilder is a large private company and the buyer and seller were both large existing stakeholders. Although losing $20M sounds bad, Gannett’s own stock has dropped nearly 50% this year alone, nearly $4B lost in market capitalization. Barron’s reported last week that Tribune, taken private in ’07 by Sam Zell for $8.2B, will be “hard-pressed to avoid bankruptcy, given plunging newspaper profits and its $12 billion of debt. Even a sale of the Tribune-owned Chicago Cubs and Wrigley Field for more than $1 billion would do little to cut Tribune’s debt. Zell says Tribune has adequate liquidity, but its public debt trades for less than 40 cents on the dollar, so investors aren’t convinced.”
So even though CareerBuilder has dropped in value, it may be one of the better assets on both company’s balance sheets (Cubs and Wrigley aside). I sure am glad I’m not in the newspaper business.
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