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NEW YORK - Gannett Co., Inc. (NYSE:GCI), the media and marketing solutions company, announced a significant debt refinancing plan with Apollo (NYSE:APO) managed funds, aimed at extending debt maturities and reducing the dilutive effect of convertible notes. The new senior secured credit facility, totaling up to $900 million, will replace existing obligations and includes a $675 million initial term loan and a $225 million delayed draw facility.
The proceeds from the new Term Loan Facility will be used to fully repay Gannett's current senior secured term loan due October 15, 2026, and to address the 6.0% first lien notes maturing on November 1, 2026. Additionally, up to 50% of the 6.0% Senior Secured Convertible Notes due 2027 will be repurchased for cash. The Term Loan Facility, bearing interest at SOFR plus 5.0%, will mature five years post-closing.
Gannett also plans to offer holders of the 2026 Notes the option of cash or equivalent loans from the new facility. Apollo Funds have agreed to tender their $81 million of the 2026 Notes for cash in the exchange offer. The Delayed Draw Facility may also be used to repurchase any additional tendered 2026 Notes or redeem the remaining balance as per the indenture terms.
Furthermore, Apollo Funds will exchange approximately $441 million of the 2027 Notes for cash and new 6.0% Senior Secured Convertible Notes due 2031, with similar terms to the existing notes. Gannett retains the option to redeem up to 30% of the 2031 Notes' principal amount at a 140% redemption price before December 1, 2030, or earlier under certain conditions. The company may also negotiate additional exchanges or repurchases of the 2027 Notes privately.
The transactions are expected to conclude in the fall, pending necessary approvals and standard closing conditions. There is no guarantee that the offers for the 2026 Notes or any repurchase or exchange of the 2027 Notes will be successful.
Chairman and CEO Michael Reed expressed confidence that the refinancing reflects Gannett's strategic progress and will provide a "generous runway" to manage debt, reduce dilution from convertible notes, and enable further investment for growth and shareholder value. Apollo Partner Robert Givone also reaffirmed Apollo's support for Gannett's balance sheet strengthening and financial flexibility through this refinancing.
This news is based on a press release statement from Gannett Co., Inc.
In other recent news, Apollo Global Management (NYSE:APO) has been the subject of several analyst adjustments. Argus reduced Apollo's stock target from $135 to $125, citing higher funding costs and lower growth. This came after Apollo's Q2 earnings fell slightly short of expectations, with distributable earnings of $1.64 per share, down from $1.70 a year prior. However, revenue saw a modest 2% year-over-year increase to $2.1 billion.
Meanwhile, BofA Securities upgraded Apollo's stock from Neutral to Buy, adjusting the price target to $123. This followed a 21% decline in the stock over a three-day period, influenced by Q2 earnings and a shifting interest rate forecast. Despite reduced earnings per share estimates, the new price target suggests a 25% return potential for Apollo's shares.
Citi also revised its price target for Apollo, lowering it to $135 from $140, while maintaining a Buy rating. This adjustment was in response to the company's Q2 results and a more cautious projection for the Strategic Real Estate earnings.
TD Cowen lowered Apollo's price target from $147 to $137, maintaining a Buy rating. The adjustment was due to concerns about the guidance for Apollo's insurance division, Strategic Risk Enterprise.
Lastly, BMO Capital reduced its price target for Apollo to $123 from $125, while maintaining an Outperform rating. Despite the minor adjustment, BMO Capital's assessment reflects an optimistic view on Apollo's financial health and market position. These are the recent developments for Apollo Global Management.
InvestingPro Insights
In light of Gannett Co., Inc.'s recent debt refinancing plan with Apollo-managed funds, it's worth noting several key metrics and insights from InvestingPro that may provide context to Apollo's financial position and market performance. Apollo (NYSE:APO) is a prominent player in the Financial Services industry and has maintained dividend payments for 14 consecutive years, demonstrating a commitment to shareholder returns. Additionally, Apollo's stock price movements are known to be quite volatile, which could be an important consideration for investors monitoring the impact of the refinancing deal.
Here are some real-time data metrics from InvestingPro as of the last twelve months as of Q2 2024:
- Market Cap (Adjusted): 63.51B USD
- P/E Ratio (Adjusted): 12.37
- Price / Book: 4.58
InvestingPro Tips for Apollo reveal that analysts have revised their earnings downwards for the upcoming period and anticipate a sales decline in the current year. However, it's also predicted that the company will be profitable this year and has been profitable over the last twelve months. These insights, coupled with Apollo's high return over the last decade and strong return over the last five years, could be of interest to investors considering the implications of Gannett's refinancing arrangement with Apollo.
For those seeking a deeper analysis, there are additional InvestingPro Tips available that could provide further clarity on Apollo's financial health and market outlook. To explore these insights, visit InvestingPro's dedicated page for Apollo at https://www.investing.com/pro/APO.
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