Nexstar Broadcasting tables $4.1 bn takeover bid for Media General
28 September 2015
Nexstar Broadcasting Group Inc today said that it will buy Media General Inc in a deal that would value it at $4.1 billion in order to become the second-biggest local TV station operator in the US.
But Media General recently signed an agreement to buy Meredith Corp for about $2.34 billion in order to become the industry's third-largest regional player.
Nexstar has offered to pay $10.50 per share in cash and 0.0898 of its shares, for a total of $14.50 per share, a premium of 30 per cent to Media General's Friday closing price.
The proposed deal will generate pro-forma annual free cash flow of over $450 million, which Nexstar plans to use for investing in the business and enhance long-term shareholder returns.
Post closing, Nexstar will own, operate, program or provides sales and other services to 114 television stations and related digital multicast signals reaching 59 markets, reaching 39 percent of all US television households.
Nexstar, based in Texas, is a diversified media company that owns, operates, programs or provides sales and other services to 107 television stations and related digital multicast signals.
Its portfolio includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV, The CW, Telemundo, Bounce TV, Me-TV, LATV, RTV, Estrella, This TV, Weather Nation Utah, Movies! and News/Weather.
Richmond Newspapers was formed in 1940 through the merger of Richmond, Virginia's two newspapers, the Times-Dispatch and News Leader, and later diversified and renamed to Media General.
It now operates or services 71 television stations in 48 markets and its portfolio of broadcast, digital and mobile products reaches 23 per cent of US TV households and more than 50 per cent of the US Internet audience.
Perry Sook, chairman, president and CEO of Nexstar, said, ''The transaction we are proposing would be a transformational event for both Nexstar and Media General shareholders and would deliver superior, immediate and long-term value to Media General's shareholders compared with Media General's proposed acquisition of Meredith.''
"It is illogical that Media General's Board has refused to engage with us and has instead pursued an ill-conceived and value-destructive acquisition of Meredith that would once again expose Media General shareholders to the risks of the low-margin publishing business," he added.