Fortress Investment's Involvement in GateHouse Media's IPO Leads Share Up 20%

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GateHouse Media Shares Rise 20% in Debut [Reuters]

Summary: During its IPO yesterday, shares of newspaper publisher GateHouse Media Inc. climbed 20%, a day after pricing at the top of a forecast range. Shares of the company closed at $21.17, after pricing at a $16-$18 range. In total, GateHouse raised $248 million on a 13.8 million share offering, giving the company a market capitalization of about $621 million. The heavily in-debt company plans to use the proceeds of the IPO to pay down some of its debt. Last year, GateHouse paid $21 million in debts on an operating income of less than $14 million. Perhaps the major reason for the success of its IPO was the involvement of the well respected Fortress Investment Group. Said Francis Gaskins, President of LA-based research firm IPO Desktop, "This one has an air of real mystique to it because of Fortress... The financials look terrible, but [Fortress] is saying 'we put in a top five management team and you can trust us.'"
Related links: Newspapers: Another Slide Coming? • Declining Print Ad Revenues Take Toll on Newspaper Earnings • IPO For GateHouse [Forbes] • GateHouse Media Sets 11.5 Mln Share IPO at $16-$18 [Reuters - 10.11.06]

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