Gannett Comes Out On Top In Slipping CareerBuilder

Fitz: Gannett picked up another trophy this morning -- and all for treading so carefully when its peers were binging on big deals.

In one sense, Gannett’s $135 million deal to buy an additional 10% stake in CareerBuilder from partner Tribune Co. is no blockbuster. But it’s undeniably the result of blockbuster blow-back. But the deal also represents a discount in the value of CareerBuilder, driven doubtless by Tribune’s need for cash to draw down a debt load that still hovers north of $13 billion, most of it taken on to finance Chicago real estate mogul Sam Zell’s deal to take Tribune private.

Back in 2006, Gannett Co., Tribune and Knight Ridder each held a one-third stake in CareerBuilder. But then The McClatchy Co.’s blockbuster acquisition Knight Ridder enabled Gannett and Tribune to exercise their options to bulk up their stakes at McClatchy’s expense. With a small stake later going to give Microsoft Corp. a 4% share, McClatchy now owns 14.4% of CareerBuilder.

Gannett and Tribune each paid McClatchy $142 million to increase each of their equity stakes to 42.5%. -- so the agreement valued CareerBuilder at $1.55 billion.  Wednesday’s deal, giving CareerBuilder a back-of-the-envelope value of $1.35 billion means everyone agrees CareerBuilder has become less valuable -- or Tribune chief Zell is willing to take about a 12% haircut to raise some cash.

Zell called the deal a good chance to "monetize some of the value CareerBuilder has built over the years" while keeping a hand in online recruitment. The bigger deal on the horizon, of course, is the impending sale of the Chicago Cubs and its hallowed ballpark Wrigley Field. Zell is unlikely to discount those properties.