Media General and Nexstar Reach Merger Deal

Media General Inc. said it has negotiated a deal to be bought by Nexstar Broadcasting Group Inc., though that takeover would be contingent on the termination of its deal to merge with Meredith Corp., which itself fired back with new terms for a merger Thursday.

Media General agreed to buy Meredith in September for about $2.4 billion in cash and stock amid consolidation in the U.S. broadcast industry. Later that month, Nexstar went public with an offer to buy Media General.

On Thursday, Media General said in the Nexstar deal stockholders would receive $10.55 in cash and 0.1249 of a Nexstar share for each Media General share, valuing the offer at $17.66 a share according to Wednesday's closing price, plus a contingent value right to cash proceeds from the sale of Media General's spectrum. Media General shareholders would have a 33.4% stake in Nexstar.

Meredith responded with proposed amendments to its merger with Media General to sweeten the deal in comparison to what it called an "unsolicited bid" from Nexstar.

In Meredith's new offer, Media General stockholders would receive $3.90 a share in cash, one share of the combined Meredith Media General in exchange for each Media General share and a contingent value right from the sale of Media General's spectrum. Meredith Media General would pay an annual dividend starting at 68 cents a share.

"Given the compelling and superior value inherent in this proposal, we ask that the Media General Board of Directors re-enter serious negotiations around the merger of equals structure and its merits," said Meredith Chief Executive Stephen Lacy.

Media General shareholders would have a 50.2% stake and Meredith shareholders would receive 2.8244 shares in the new company for each Meredith share for the remaining stake. Meredith shareholders would receive $14.95 in cash per share, totaling $685 million.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

January 07, 2016 11:45 ET (16:45 GMT)

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