S&P: GateHouse Media unaffected

Standard & Poor's said its rating and outlook on GateHouse Media Operating Inc. (B+/stable) are not affected by the company's bid to acquire several daily and non-daily publications from Morris Publishing Group LLC (BB-/negative).

S&P said it expects the deal to be modestly de-leveraging, as it will be largely financed with cash on hand from GateHouse's sale of its Huntington, W.Va., daily newspaper and proceeds from its follow-on equity offering in July.

Still, the company's financial flexibility remains constrained by an acquisitive growth strategy, resulting in pro forma leverage of about 6 times and a significant quarterly cash dividend, the agency said.

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