Combined Company, To Be Named Nexstar Media
Group, Will Be a Leading, Diversified Local Marketing and Content
Platform with Strong Financial and Growth Profile
Shareholders of Both Companies to Realize
Immediate and Long-Term Value
Nexstar Broadcasting Group, Inc. (Nasdaq:NXST) and Media
General, Inc. (NYSE:MEG) announced today that they have entered
into a definitive merger agreement whereby Nexstar will acquire all
outstanding shares of Media General for $10.55 per share in cash
and 0.1249 of a share of Nexstar Class A common stock for each
Media General share. The agreement includes potential additional
consideration in the form of a contingent value right ("CVR")
entitling Media General shareholders to net cash proceeds as
received from the sale of Media General's spectrum in the Federal
Communication Commission’s upcoming Incentive Auction. Upon
closing, the transaction is expected to be immediately accretive to
Nexstar’s operating results (inclusive of expected financial and
operating synergies and the planned divestiture of certain assets).
To reflect its broadened base of operations and capabilities,
Nexstar will change its name to Nexstar Media Group, Inc. upon the
completion of the transaction.
The transaction is not subject to any financing condition and
Nexstar has received committed financing for the transaction
totaling $4.7 billion from BofA Merrill Lynch, Credit Suisse and
Deutsche Bank.
The execution of the definitive agreement between Nexstar and
Media General follows the termination of the proposed merger
transaction between Meredith Corporation (NYSE:MDP) and Media
General. Pursuant to the Meredith-Media General merger agreement,
Meredith will receive the $60 million termination fee. In addition,
Meredith will receive an opportunity to negotiate for the purchase
of certain broadcast and digital assets currently owned by Media
General.
The transaction, which has been unanimously approved by the
boards of directors of both companies, values Media General at
$17.14 per share, based on Nexstar’s 30-day volume weighted average
price per share as of January 26, 2016, plus the value of the CVR.
The transaction consideration represents an approximate 54% premium
over the closing share price of Media General on September 25,
2015, the last trading day prior to Nexstar’s initial public
announcement regarding its interest in acquiring Media General.
The new Nexstar Media Group will be one of the nation’s leading
providers of local news, entertainment, sports, lifestyle and
network programming and content through its broadcast and digital
media platform with annual revenue in excess of $2.3 billion. With
171 full power television stations in 100 markets and a diverse and
growing digital media operation, Nexstar Media Group will offer
superior engagement across all devices and influence on consumers’
purchasing decisions unrivaled by other media, including
large-scale reach to approximately 39% of all U.S. television
households.
Perry Sook, Chairman, President and CEO of Nexstar, commented,
“The acquisition of Media General’s broadcasting and digital media
assets represent a transformational growth opportunity for Nexstar
and is strategically and financially compelling. The transaction
increases Nexstar’s broadcast portfolio by approximately two thirds
with very limited overlap with our existing properties, more than
doubles our audience reach, provides entrée to 15 new top-50 DMAs
and offers synergies related to the increased scale of the combined
digital media operations.
“Financially, the transaction is expected to more than double
our revenue and adjusted EBITDA and result in over $500 million of
annual free cash flow which we intend to allocate to leverage
reduction, additional strategic growth investments and the return
of capital to shareholders. Importantly, Nexstar Media Group’s
annual free cash flow per share is expected to exceed $10.50 per
year over the 2015/2016 period, marking an approximate 34% increase
in Nexstar’s pro-forma 2015/2016 free cash flow per share from
Nexstar’s current pro-forma 2015/2016 free cash flow per share of
$7.85.
“We intend to implement our proven strategy of focusing on local
programming and effective digital media marketing solutions across
the assets being acquired and will marry best of breed practices
from our existing operations with those from Media General. Led by
a proven broadcast and digital media management team with a
long-term record of operating execution, M&A integration,
delivering strong compound annual growth in free cash flow and
creating shareholder value, we are confident that the new Nexstar
Media Group will be strongly positioned for consistent long-term
success.”
Vincent L. Sadusky, President and CEO of Media General, said,
“We are pleased to reach this agreement with Nexstar, which
provides Media General shareholders with substantial and immediate
value, as well as the opportunity to participate in the significant
upside potential of the combined company. Together with Nexstar, we
can deliver a more comprehensive, integrated and competitive
offering across all markets for the benefit of our advertisers and
brands. I am thankful for the hard work and dedication of our
talented employees, and I'm confident they will continue to make
many valuable contributions as part of a larger and stronger
organization. I look forward to working closely with the Nexstar
team to bring our companies together to realize the power of this
compelling combination and ensure a smooth transition.”
Upon completion of the transaction, expected late in the third
quarter/early in the fourth quarter of 2016, Media General and
Nexstar shareholders will hold approximately 34% and 66%,
respectively, of the combined company’s outstanding shares. In
addition, two Media General directors will join the Nexstar Board
of Directors at closing. Affiliates of John R. Muse, holding
approximately 9% of Media General’s outstanding shares, have
entered into a voting agreement that requires them to vote for the
transaction with Nexstar and against any alternative transaction
unless the merger agreement is terminated.
The transaction is subject to a vote by stockholders of Media
General and Nexstar, FCC approval and other regulatory approvals
(including expiration of the applicable Hart-Scott-Rodino waiting
period) and other customary closing conditions. Nexstar intends to
divest certain television stations necessary to obtain FCC approval
of the proposed transaction.
BofA Merrill Lynch is acting as financial advisor and Kirkland
& Ellis LLP is acting as legal counsel to Nexstar in connection
with the proposed transaction. RBC Capital Markets, LLC and
Goldman, Sachs & Co. are acting as financial advisors to Media
General and Fried, Frank, Harris, Shriver & Jacobson LLP and
Weil, Gotshal & Manges LLP are acting as its legal counsel.
Conference Call, Webcast, Investor Presentation
Nexstar and Media General will host a joint conference call
today, Wednesday, January 27 at 10:00 a.m. ET to review the
transaction and host a question and answer session. To access the
conference call, interested parties may dial 888/452-4004 (domestic
callers) or 719/234-0008 (international callers). The Conference ID
Number is 653465. Participants can also listen to a live webcast of
the call from Nexstar’s website at www.nexstar.tv or Media
General’s website at
www.mediageneral.com/investor/presentations/index.htm. During the
conference call and webcast, management will review a presentation
summarizing the proposed transaction which can be accessed at
www.nexstar.tv. A webcast replay will be available for 90 days
following the live event at www.nexstar.tv. Please call five
minutes in advance to ensure that you are connected. Questions and
answers will be taken only from participants on the conference
call. For the webcast, please allow 15 minutes to register,
download and install any necessary software.
About Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting Group is a leading diversified media
company that leverages localism to bring new services and value to
consumers and advertisers through its traditional media, digital
and mobile media platforms. Nexstar owns, operates, programs or
provides sales and other services to 106 television stations and
related digital multicast signals reaching 57 markets or
approximately 17.3% of all U.S. television households. Nexstar’s
portfolio includes primary affiliates of NBC, CBS, ABC, FOX,
MyNetworkTV and The CW and multicast affiliates of Telemundo,
Bounce TV, Me-TV, LATV, Estrella, This TV, Weather Nation Utah,
Movies! and News/Weather. Nexstar’s community portal websites offer
additional hyper-local content and verticals for consumers and
advertisers, allowing audiences to choose where, when and how they
access content while creating new revenue opportunities.
Pro-forma for the completion of all announced transactions
Nexstar will own, operate, program or provide sales and other
services to 171 television stations and related digital multicast
signals reaching 100 markets or approximately 39% of all U.S.
television households. For more information please visit
www.nexstar.tv.
About Media General
Media General is one of the nation's largest local media
companies that operates or services 71 television stations in 48
markets, along with the industry's leading digital media business.
Its robust portfolio of broadcast, digital and mobile products
informs and engages 23 percent of U.S. TV households and more than
two-thirds of the U.S. Internet audience. Media General has one of
the industry's largest and most diverse digital media businesses
that includes LIN Mobile, Federated Media, HYFN, Dedicated Media
and BiteSizeTV, all under the LIN Digital banner. With unmatched
local-to-national reach and integrated marketing solutions, Media
General is a one-stop-shop for agencies and brands that want to
effectively and efficiently reach their target audiences across all
screens. Media General trades on the NYSE under the symbol “MEG.”
For more information, visit www.mediageneral.com.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. In connection with
the Agreement and Plan of Merger, by and between Nexstar
Broadcasting Group, Inc. (“Nexstar”), Media General, Inc. (“Media
General”) and Neptune Merger Sub, Inc. (“Merger Sub”), Nexstar and
Media General intend to file relevant materials with the U.S.
Securities and Exchange Commission (“SEC”), including a
Registration Statement on Form S-4 to be filed by Nexstar that will
contain a joint proxy statement/prospectus. INVESTORS AND SECURITY
HOLDERS OF NEXSTAR AND MEDIA GENERAL ARE URGED TO READ THE
REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders will be
able to obtain free copies of these documents (when available) and
other documents filed with the SEC by Nexstar or Media General
through the web site maintained by the SEC at http://www.sec.gov.
In addition, the joint proxy statement/prospectus (when finalized)
will be mailed to stockholders of Nexstar and Media General.
Certain Information Regarding Participants
Nexstar and Media General and their respective directors and
executive officers may be deemed to be participants in any
solicitation with respect to the proposed transaction under the
rules of the SEC. Security holders may obtain information regarding
the names and interests of Nexstar’s directors and executive
officers in Nexstar’s Annual Report on Form 10-K for the year ended
December 31, 2014, which was filed with the SEC on March 2, 2015,
and Nexstar’s proxy statement for the 2015 Annual Meeting of
Stockholders, which was filed with the SEC on April 24, 2015.
Information about Media General’s directors and executive officers
is available in Media General’s definitive proxy statement, dated
March 13, 2015, for its 2015 annual meeting of shareholders. These
documents can be obtained free of charge from the web site
indicated above. Additional information regarding the participants
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Form S-4
and the joint proxy statement/prospectus that Nexstar will file
with the SEC when it becomes available.
Forward-Looking Statements
This communication includes forward-looking statements. We have
based these forward-looking statements on our current expectations
and projections about future events. Forward-looking statements
include information preceded by, followed by, or that includes the
words "guidance," "believes," "expects," "anticipates," "could," or
similar expressions. For these statements, Nexstar and Media
General claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. The forward-looking statements contained in this
communication, concerning, among other things, the ultimate outcome
and benefits of any possible transaction between Nexstar and Media
General and timing thereof, and future financial performance,
including changes in net revenue, cash flow and operating expenses,
involve risks and uncertainties, and are subject to change based on
various important factors, including the timing to consummate the
proposed transaction; the risk that a condition to closing of the
proposed transaction may not be satisfied and the transaction may
not close; the risk that a regulatory approval that may be required
for the proposed transaction is delayed, is not obtained or is
obtained subject to conditions that are not anticipated, the impact
of changes in national and regional economies, the ability to
service and refinance our outstanding debt, successful integration
of Media General (including achievement of synergies and cost
reductions), pricing fluctuations in local and national
advertising, future regulatory actions and conditions in the
television stations' operating areas, competition from others in
the broadcast television markets, volatility in programming costs,
the effects of governmental regulation of broadcasting, industry
consolidation, technological developments and major world news
events. Unless required by law, Nexstar and Media General undertake
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this communication might not
occur. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this release. For
more details on factors that could affect these expectations,
please see Media General’s and Nexstar’s filings with the
Securities and Exchange Commission.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160127005732/en/
Nexstar
ContactsInvestors:Thomas E. CarterChief Financial
OfficerNexstar Broadcasting Group, Inc.(972) 373-8800orJCIRJoseph
Jaffoni/Jennifer Neuman(212) 835-8500 or nxst@jcir.comorInnisfree
M&A IncorporatedLarry Miller/Jonathan Salzberger/Scott
Winter(212) 750-5833orMedia:Sard Verbinnen & CoGeorge
Sard/Jim Barron/Jared Levy(212) 687-8080orMedia General
Contacts:Shareholder/Financial Analysts:Jim
WoodwardChief Financial Officer(804)
887-5110jwoodward@mediageneral.comorDan Burch / Charlie
KoonsMacKenzie Partners, Inc.(212) 929-5500orMedia:Courtney
GuertinMarketing & Communications Director(401)
457-9501cguertin@mediageneral.comorJamie Moser / Andi RoseJoele
Frank, Wilkinson Brimmer Katcher(212) 355-4449
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