Gannett Co Inc, one of the newspaper owners of Cars.com, is nearing an agreement to buy the portion of the auto-sales website that it does not already own for US$1.8 billion (S$2.24 billion), people familiar with the matter said on Monday.
The deal, which a source said could be announced as early as Tuesday, would be the latest step for Gannett, the largest US newspaper chain and publisher of USA Today, to diversify its business away from newspapers.
Gannett has been snapping up broadcast TV stations to bolster its portfolio against declining advertising revenue and newspaper readership. It spent US$1.5 billion on buying the broadcaster Belo last year, nearly doubling its broadcast TV holdings to more than 40 stations.
The deal will also bolster Gannett's digital portfolio, which includes a stake in the recruitment website CareerBuilder.
A spokesman for Gannett declined to comment while a representative for Cars.com did not return a request for comment.
Gannett is one of the five newspaper publishers that back Classified Ventures, the entity that owns Cars.com. Before the deal, it had a 27 per cent stake in Cars.com, which lets users check prices, compare models and read reviews of auto dealers. The owners that will be bought out by Gannett are Tribune Media Co, McClatchy Co, A.H. Belo Corp and Graham Holdings Co.
After the news broke late Monday, shares in McClatchy rose 12 per cent in after-hours trading, while shares in Dallas Morning News publisher A.H. Belo rose 6 per cent.
While Gannett would take control of the company, which is valued at US$2.5 billion, the previous owners of Cars.com have an agreement in place to sell ads and generate revenue for five years.
Reuters reported in May that Gannett was exploring a bid for the entire company. Bloomberg News first reported on Monday that Gannett had agreed to a deal.