TEGNA (TGNA) Substantially Reduces Stake In CareerBuilder
Zacks Investment Research | Jun 19, 2017 09:09PM ET
Leading TV station owner TEGNA Inc. (NYSE:TGNA) recently sold a 40.5% stake in web portal CareerBuilder, to an investor group led by Apollo Global Management and Ontario Teachers’ Pension Plan Board. Management expects to collect around $250 million from this deal. The company will now hold 12.5% of CareerBuilder.
In addition to TEGNA, two more companies, Tribune Media Co. (NYSE:TRCO) and McClatchy Co. (NYSE:MNI) also sold their stakes in CareerBuilder. Tribune Media reduced its stake from 32% to 8% for a consideration of around $157 million. Meanwhile, McClatchy sold the majority of its 15% stake for approximately $76 million.
For the last one year, TEGNA has tried hard to evaluate strategic alternatives for its job-hunting unit, CareerBuilder, including a possible sale. CareerBuilder, a global leader in human capital solutions, provides services ranging from labor market intelligence to talent management software and other recruitment solutions. It is the largest online job site in the U.S., both according to traffic as well as revenue measures, with a presence in more than 60 markets worldwide.
Under the leadership of TEGNA, CareerBuilder shifted its focus from ad sales to licensed software. Last year it bought background screening and drug testing company, Aurico, and a 75% stake in Workterra, a benefits administration platform. After the reduction in stake holdings, CareerBuilder will be shown as an equity investment in TEGNA’s future results.
Notably, on Jun 1, 2017, TEGNA completed the spin-off of Cars.com, creating two publicly traded companies - TEGNA, an innovative media company with the largest broadcast group among major network affiliates in the top 25 markets and Cars.com, a leading digital automotive marketplace. The planned spin-off will help TEGNA and Cars.com to take advantage of differentiated opportunities in the rapidly evolving broadcast TV and digital landscapes.
Price Performance of TEGNA
So far, 2017 has turned out to be a pathetic one for TEGNA shares. Year to date, the stock price has declined 28.66% in contrast to an 8.60% gain of the Zacks categorized Zacks Investment Research
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