Looks like Rupert Murdoch’s newspaper empire is about to get a bit bigger. Tribune Co has reached agreement in principle to sell Newsday to News Corp for about $580 million, a source familiar with the matter told Reuters. The deal should give Tribune CEO Sam Zell some much-needed breathing room, drawing down some of the debt he used to purchase Tribune last year. And the Journal said that cost savings of combining Newsday print operations with the New York Post should wipe out much of the tabloid’s persistent red ink — but only if media ownership and other regulatory issues can be resolved. What’s in store for a Murdoch-owned Newsday? Perhaps a new managing editor, if the Journal deal is any precedent. Time reported on its website that Marcus Brauchli, who “tried to find a middle path between the paper’s traditionalists and Murdoch’s new vision for the paper,” has submitted his resignation.
Italy is scrambling to keep ailing flag carrier Alitalia in the air after Air France-KLM withdrew its buyout offer. With an offer from Air France-KLM now seemingly off the table, in part because of new Prime Minister Silvio Berlusconi’s statements on the campaign trail, it is now losing at least 1 million euros a day and could run out of money within weeks or a few months.
Royal Bank of Scotland unveiled Europe’s biggest-ever rights issue of 12 billion pounds ($24 billion) to cover a potential 5.9 billion pound writedown on the value of toxic assets and help rebuild a stretched balance sheet. Britain’s second biggest bank said on Tuesday it also expects disposals to generate 4 billion pounds in core capital this year, which will mostly come from the sale of all or a stake in its insurance business, which includes prized brands Direct Line and Churchill.
** QBE Insurance Group Ltd, Australia’s top insurer by premium income, said it has extended a takeover offer for smaller rival Insurance Australia Group Ltd to May 5, after the initial offer period expired on Monday.
** Bank of Montreal said that its investment and corporate banking unit will buy Chicago-based bond dealer Griffin, Kubik, Stephens & Thompson Inc for an undisclosed amount.
** News Corp’s Rupert Murdoch left the door open to a joint bid with Microsoft Corp to buy Yahoo Inc, a day ahead of Yahoo’s quarterly financial report.
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In what could become a model for future merger deals for the hard-pressed newspaper industry, the Tribune Co is apparently close to selling its property Newsday to the media empire News Corp, according to The Wall Street Journal. This deal would consolidate News Corp’s already existing marketshare in the greater New York area, potentially giving the company the ability to exercise new synergies. “Under the terms being discussed, Newsday would be part of a joint venture with News Corp’s New York Post and various non-newspaper assets owned by News Corp, people familiar with the matter said. News Corp. would own the bulk of the combination, with Tribune retaining a stake of less than 5%,” The Journal reported in an article on Tuesday morning. Although The Journal reports that this deal was pretty much fashioned by the two companies’ top people, Rupert Murdoch and Sam Zell, there are sets of other personal connections between the two companies that could play an important role when the merger occurs, which would make it easier to achieve the economies of scale that the deal proposes.
- Posted by NewsVisual