Tegna said that CEO Gracia Martore will retire after the company completes the spinoff of Cars.com.
Dave Lougee, currently president of Tegna Media, will succeed Martore as CEO and president.
The divestiture of Cars.com, expected to close in the first half of 2017, will create two independent public companies. Tegna said it is also looking at strategic alternatives for another online business, CareerBuilder.
“Over the last four and a half years, we’ve taken a series of important strategic steps to increase the value of our businesses, including the acquisition of broadcast stations from Belo Corp. and London Broadcasting, the acquisition of full ownership of Cars.com, and the spin-off of the Gannett publishing business,” said Martore. “The spin-off we are announcing today is the next logical step in our ongoing transformation to best position our market-leading businesses and continues our strong track record of creating value for shareholders.”
Martore said the transaction will help both Tegna and Cars.com. “Cars.com will have the flexibility to invest in further organic growth and to participate in the active digital automotive M&A market, and Tegna will have a strong balance sheet and cash flow to continue to pursue investment in organic growth and opportunistic acquisitions and to provide an optimal mix of capital returns to shareholders,” she said.
Tegna owns 53% of CareerBuilder, with Tribune Media and McClatchy owning the rest.
Analyst Marci Ryvicker of Wells Fargo said she thought separating the digital businesses would make Tegna an easier company to track. “While this does seem to be quite a sudden shift in strategy for TGNA, we view these initial announcements as positives for the stock,” she said in a note Wednesday morning.
Tegna stock rose nearly 4% to $20.79 in early trading Wednesday.
