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Belo shares the wealth in newspaper spin-off

Will become separately traded companies
February 8, 2008 12:00:00 AM PST
Belo Corp. said Friday it has closed the deal to spin off its four newspapers, including The Dallas Morning News, a move that frees the media company from the struggling newspaper industry. Belo shareholders will get one share of the newly formed A.H. Belo Corp. for every five Belo shares they owned on Jan. 25.

Shares of new company are scheduled to begin regular trading Monday on the New York Stock Exchange.

"We are excited about A. H. Belo's prospects as a separate publicly traded newspaper company," Robert W. Decherd, Belo's chairman, president and CEO, said in a statement.

Separately, Fitch Ratings kept Belo debt ratings at junk status on Friday, but raised the company's outlook to stable from negative. Fitch said Belo has a "generally predictable revenue base" and will continue to control costs.

This week, Standard & Poor's said it would include A.H. Belo in an index of 600 smaller companies after trading Friday, replacing Napster Inc., which is too small for the index. The remaining Belo broadcast company will stay on S&P's index of 400 middle-sized companies.

Dallas-based Belo owns 20 television stations. Shareholders had pushed to split the company, hoping Belo shares would rise without exposure to the newspaper industry, which is struggling with declining advertising revenue.

After the spin-off is complete, A.H. Belo will own the Dallas paper and The Providence (R.I.) Journal, The Press-Enterprise in Riverside, Calif., and the Denton (Texas) Record-Chronicle, plus the newspapers' Web sites.

Shares of Belo rose 37 cents, or 2.3 percent, $16.36. They've traded in a 52-week range of $14.90 to $22.94.

 

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