The parent company of GateHouse Media, which owns the Hope Star and Nevada County Picayune, is merging with a Japanese-based investment group.
The parent company of GateHouse Media, which owns the Hope Star and Nevada County Picayune, is merging with a Japanese-based investment group. SoftBank Group Corp. and Fortress Investment Group LLC have announced that they have entered into a definitive merger agreement under which SoftBank will acquire Fortress for approximately $3.3 billion in cash.
Fortress Investment purchased GateHouse Media in 2005. GateHouse currently owns 121 daily newspapers in the U.S., along with multiple weekly publications including the Hope Star and Nevada County Picayune.
In addition, GateHouse owns state newspapers located in Arkadelphia, Stuttgart, Fort Smith, Alma, Booneville, Cabot, Charleston, Gurdon, Jacksonville, Lonoke, Maumelle, Newport, North Little Rock, Paris, Helena, Heber Springs, White Hall and the Pine Bluff Commercial.
The Pine Bluff Commercial also prints the Star and Picayune.
GateHouse CEO Kirk Davis, who also serves as chief operating officer, told the Boston Business Journal that he didn’t anticipate much changing.
“We are focused on continuously improving our business and transformation,” he said. “Having said that, I did learn a little about ‘Kaizen’ working for Fidelity” — referring to the Japanese work for continuous improvement in working practices —“and expressed to my team that if we stay on that track, we should be in good shape, especially considering the pending ownership change.”
Under the terms of the merger agreement, which was unanimously approved by a Special Committee of Independent Directors of Fortress’s Board of Directors and Fortress’s full Board of Directors, each Fortress Class A shareholder will receive $8.08 per share.
In addition, each Fortress Class A shareholder may receive up to two regular quarterly dividends prior to the closing, each in an amount not to exceed $0.09 per Class A Share. Fortress plans to maintain its current base dividend of $0.09 per share for the fourth quarter of 2016 and, if closing does not occur prior to the applicable payment date, for the first quarter of 2017.
Pete Briger, Wes Edens and Randy Nardone (the “Fortress Principals”) have agreed to continue to lead Fortress, and have committed to invest 50 percent of their after-tax proceeds from the transaction in Fortress-managed funds and vehicles, underscoring a deep alignment with the interests of Fortress’s limited partner investors, and in equity securities of SoftBank and SoftBank-managed funds and vehicles, according to a news release from SoftBank.
In addition, the Fortress Principals have agreed to vote shares representing an aggregate of 34.99 percent of the outstanding Fortress voting shares held by them in favor of the transaction, the news release said.
Fortress’s senior investment professionals will remain in place and will retain their significant participation interests in fund performance. Fortress will operate within SoftBank as an independent business headquartered in New York, and SoftBank is committed to maintaining the leadership, business model, brand, personnel, processes and culture that have supported Fortress’s success to date.
“Fortress’s excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform,” said Masayoshi Son, Chairman and CEO of SoftBank Group Corp, in the news release.
“For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth.”