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NEW YORK (AP) — Dex One Corp. and SuperMedia Inc., two Yellow Pages publishers, on Tuesday said they agreed to merge, with the goal of saving money in a dwindling business.
Shareholders in the companies will exchange their shares for new shares in a new company, Dex Media.
Based on the closing stock prices of Dex One and SuperMedia on Monday, the new company would be worth $100 million. But shares of both existing companies jumped in heavy Tuesday morning trading, putting the total value of the new company at about $115 million.
Shares of Dex One added 48 cents, or 39 percent, to $1.81, while SuperMedia shares gained $1.27, or 49 percent, to $3.85.
Dex One shareholders will own 60 percent of the new company and SuperMedia shareholders will own 40 percent, proportions that reflect the relative values of the companies as of Monday's close.
The companies said Dex Media should be able to cut annual costs by $150 million to $175 million by 2015, partly by job cuts. The two companies employ a combined 5,800 people.
The deal is expected to close in the fourth quarter of this year.
The CEO of SuperMedia, Peter McDonald, will be CEO of the combined company. Alan Schultz, chairman of Dex One's board, will chair the board of the combined company.
Alfred Mockett, Dex One's CEO, will step down when the deal closes.
Both companies filed for Chapter 11 bankruptcy protection in 2009, as consumers shifted from using printed directories to doing online searches. They exited bankruptcy in 2010. Both sell listings in online directories as well, but have been unable to compensate fully for the drop in print revenue.
SuperMedia is based in Dallas. It was formerly known as Idearc Media, and was spun off from phone company Verizon Communications Inc. in 2006. It reported a 17 percent drop in revenue in the first six months of this year, compared with 2011.
Dex One, which is based in Cary, N.C., was known as R. H. Donnelley until it exited bankruptcy. It reported a 12 percent drop in revenue in the first six months of this year.