NEW YORK Thomson Corp., the Toronto-based publisher of The Globe and Mail, has completed the sale of most of its U.S. newspapers including The Spectrum in St. George in a two-part transaction worth $1.58 billion.
Under the deal, USA Today publisher Gannett Co. will pay $1.125 billion for 21 newspapers in Louisiana, Maryland, Ohio, Wisconsin and Utah that have a combined circulation of 466,000.
Community Newspapers, based in Birmingham, Ala., is paying $455 million for 17 dailies in Indiana, South Georgia and West Virginia with a total circulation of 260,000.
Separately, Central Newspapers Inc., owner of The Arizona Republic, The Indianapolis Star and four other daily newspapers, said it was putting itself up for sale. The Phoenix-based company's stock soared as much as 72 percent on the news.
Spectrum interim publisher/CFO Kim Hafen said, "The Spectrum has grown greatly during its association with Thomson Newspapers. We appreciate the corporate leadership they have provided.
"Gannett has a great name in the newspaper industry. They are dedicated to publishing 'community newspapers.' We're excited to become part of that family," he said. "We will continue to be a major player in the communities we serve. We look forward to our people continuing to anticipate and exceed our advertisers' and our readers' needs."
Thomson's sales largely completed its goal, announced in February, of exiting the U.S. newspaper business to focus on selling professional and financial information services, which already make up the majority of the company's operations. Thomson plans to hold onto The Globe and Mail.
The sales involved 38 of Thomson's 49 daily U.S. newspapers, and the Toronto-based company said it expected to announce the sale of the remaining 11 soon. Also on the block are five Canadian newspapers, which Thomson said it expects to sell late this year or early next year.
Richard J. Harrington, president and CEO of Thomson, said the company was "pleased that these exceptional assets will have new homes with established newspaper companies."
Thomson said the proceeds from the sale would be used to reduce debt and allow the company to develop its information services business through investments and acquisitions. Thomson operates several professional information services, such as West Law and First Call.
In the other big industry news Thursday, Central Newspapers Inc. said it was exploring a sale or merger. The biggest prizes among the company's six daily newspapers are The Arizona Republic and The Indianapolis Star.
The company, in releasing the news late Wednesday, declined to say who the potential suitors were. But a story in The Indianapolis Star said partners could include Gannett, Tribune Co. or Knight Ridder. Other possibilities include Cox Enterprises Inc. and The McClatchy Co., whose newspaper operations are similar in size to Central's.
Central's chairman, Louis A. "Chip" Weil III, said there is no guarantee the talks will lead to a sale. Nonetheless, the reaction from investors was enthusiastic. After soaring as much as 72 percent, Central Newspapers' shares closed up $20.50, or 65 percent, to $52 on the New York Stock Exchange.
The Thomson deal was announced late Thursday after stock markets had closed.
The announcements Thursday come at a time of increasing consolidation in the newspaper business, where rising valuations have helped prompt a number of publishers to shed assets, usually papers with circulations under 50,000.
Hollinger Inc., led by the Canadian newspaper baron Conrad Black, has also announced its intention to sell off a number of its smaller newspapers in order to lift the company's stock price.
One major exception to the trend of smaller papers changing hands was Chicago Tribune publisher Tribune Co.'s takeover of Times Mirror Co., publisher of the Los Angeles Times.
Hollinger is holding onto its large metropolitan dailies even as it trims its holdings of smaller-circulation papers. Hollinger is keeping the London Telegraph, the Chicago Sun-Times and Canada's National Post.