Thomson plans to sell most U.S. and Canadian papers

Dailies in Cumberland, Salisbury are included


February 16, 2000|By BLOOMBERG NEWS

TORONTO -- Thomson Corp. said yesterday that it will sell all of its newspapers except its flagship Globe & Mail to focus on legal, financial and other Internet-related units.

Shares were up 12 percent, their biggest gain in a year.

Thomson publishes 130 newspapers, including two in Maryland: the Cumberland Times-News and the Daily Times in Salisbury. It also provides about 400 specialty information products and services in Canada, the United States and the United Kingdom.

Excluding the Globe & Mail, published in Toronto, the newspaper unit accounted for $810 million of the parent company's roughly $6 billion in revenue last year. Thomson shares rose 12 percent on the Toronto Stock Exchange.

Toronto-based Thomson is focusing on businesses such as First Call/Thomson Financial, a financial information provider, and other fast-growing units that do a lot of business on the Internet. The newspapers are expected to fetch about $2.6 billion, or 12 times cash flow, Chief Financial Officer Robert Daleo said. Cash flow for 1999 was about $220 million.

"We have decided to sell these newspapers in order to more sharply focus on technology-driven information and solutions for businesses and professionals which have global potential," President and Chief Executive Officer Richard Harrington said in a statement.

Sales at Thomson's information and services businesses have increased an average of 17 percent in the past two years, while newspaper publishing has grown only 4.5 percent.

Thomson plans to increase revenue from electronic services to more than 80 percent of total sales within five years from about 50 percent now. The company has been investing about $150 million a year for the past four or five years to help make that happen, Harrington said.

Thomson hired Goldman, Sachs & Co. to help with the sale, which the company expects to complete in the second half of the year. Thomson plans to use the money to repay debt and expand sales of electronic services, particularly Internet-based products.

Thomson's largest U.S. newspapers are the Connecticut Post, based in Bridgeport, Conn.; the Tribune in Mesa, Ariz.; the Repository in Canton, Ohio; and the Post-Crescent in Appleton, Wis.

Thomson plans to sell 49 daily newspapers in the United States and five dailies in Canada. It's also selling about 70 U.S. newspapers and five in Canada that are published weekly or less frequently than daily. The papers to be sold employ about 6,550 in the United States and 1,000 in Canada.

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