Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) (“Nexstar”) and
Media General, Inc. (NYSE: MEG) (“Media General”) announced that,
at separate meetings today, their respective shareholders approved
Nexstar’s acquisition of Media General.
Upon completion of the transaction, expected later this year,
Nexstar will change its name to Nexstar Media Group, Inc. with
Nexstar Chairman, President and CEO, Perry Sook; Executive Vice
President and Chief Financial Officer, Thomas Carter; and Executive
Vice Presidents and Co-Chief Operating Officers Timothy Busch and
Brian Jones, retaining those positions at the combined company,
which will remain headquartered in Irving, Texas. Concurrent with
the completion of the transaction, Nexstar’s Board of Directors
will be expanded from seven members to nine members as two current
members of the Media General board of directors will be appointed
to serve as directors of Nexstar. The common stock of the new
Nexstar Media Group, Inc., including shares issued pursuant to the
transaction as partial consideration to Media General shareholders,
will be listed on the NASDAQ Global Select Market and will retain
Nexstar’s current trading symbol, “NXST.”
Nexstar Chairman Sook commented, “Today’s shareholder votes were
another important milestone toward completing the acquisition of
Media General later this year. We are pleased by the support of our
shareholders, which we believe reflects their confidence in the
significant near- and long-term value this transaction will create
for investors in both companies.
“Over the last several months we have made continued progress
towards the completion of the transaction, including regulatory
filings, financing-related rating agency meetings and reviews and
recent announcements of planned station divestitures at an
aggregate value and multiple consistent with our expectations. In
addition, we are making great progress with our post-acquisition
integration facilities and team planning. Based on our work to
date, we are highly confident in our expectation that the new
Nexstar Media Group will be strongly positioned for consistent
long-term success.
“Nexstar Media Group is expected to increase our legacy
broadcast portfolio by approximately two thirds and more than
double our audience reach while presenting opportunities related to
the increased scale and complementary nature of the combined
digital media operations, which we intend to manage to
profitability. Financially, the transaction is expected to more
than double our revenue and adjusted EBITDA and be immediately
accretive upon closing.
“Using what are currently conservative expectations for the cost
of financing the transaction and identified year one synergies of
$76 million, Nexstar Media Group is expected to generate over $500
million of average annual free cash flow, with annual free cash
flow per share expected to approximate $11.15 per year over the
2016/2017 period on a pro forma basis. We intend to initially
allocate free cash flow to leverage reduction and expect covenant
leverage to approximate 4.5x by year end 2016, assuming no net
proceeds from the Federal Communication Commission’s upcoming
Incentive Auction. We expect to commence financing activities
related to the transaction in the coming weeks, after which we will
continue to pursue remaining regulatory approvals and the
completion of the transaction.”
Vincent L. Sadusky, President and Chief Executive Officer of
Media General, said, “Today’s vote is an important step toward
providing Media General shareholders with substantial and immediate
value through the transaction with Nexstar, as well as the
opportunity to participate in the significant upside potential of
the combined company. Together with Nexstar, we will deliver
comprehensive, integrated and competitive offerings across all
markets for the benefit of advertisers, brands and consumers. I
look forward to our continued close work with the Nexstar team to
realize the significant value of this compelling combination.”
The transaction is subject to customary closing conditions,
including the approval of the Federal Communications Commission,
expiration or termination of applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act and certain
third-party consents.
In addition to approving the proposed acquisition of Media
General by Nexstar, Nexstar shareholders elected Lisbeth McNabb and
C. Thomas McMillen to serve as Class I directors until the date of
Nexstar 2019 annual meeting and ratified the selection of
PricewaterhouseCoopers LLP as Nexstar’s independent registered
public accounting firm for the year ending December 31, 2016.
In addition to approving the proposed acquisition of Media
General by Nexstar, Media General shareholders approved, on a
non-binding and advisory basis, the compensation that may be paid
or become payable to Media General’s named executive officers in
connection with the transaction contemplated by the merger
agreement.
Transaction Details
On January 27, 2016, Nexstar and Media General announced that
they 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 a pro rata share of
the net cash proceeds as received (if any) from the sale of Media
General's spectrum in the Federal Communication Commission’s
upcoming Incentive Auction, subject to reduction based on the
economic benefits received by such shareholders as Nexstar
shareholders from the sale of Nexstar’s spectrum (if any) in the
Incentive Auction.
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.
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 104 full power television
stations reaching 54 markets or approximately 18.1% of all U.S.
television households. Nexstar’s portfolio includes primary
affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW. 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 transactions Nexstar will
own, operate, program or provide sales and other services to 171
television stations and their related low power and 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 owns, operates or services 71 television stations in
48 markets. Our robust portfolio of broadcast, digital and mobile
products informs and engages 23% of U.S. TV households and nearly
40% of the U.S. Internet audience.
Media General has one of the industry's largest and most diverse
digital media businesses that includes Federated Media, HYFN and
Dedicated Media. 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.
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 a 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. 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 the definitive joint proxy
statement/prospectus of Nexstar and Media General and Media
General’s and Nexstar’s other filings with the SEC.
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version on businesswire.com: http://www.businesswire.com/news/home/20160608006072/en/
Nexstar Broadcasting:Nexstar Broadcasting Group,
Inc.Thomas E. Carter, 972-373-8800Chief Financial
OfficerorJCIRJoseph Jaffoni, Jennifer Neuman212-835-8500 or
nxst@jcir.comorMedia General:Shareholder/Financial
AnalystsJim Woodward, 804-887-5110Chief Financial
Officerjwoodward@mediageneral.comorMediaCourtney Guertin,
401-457-9501Marketing & Communications
Directorcguertin@mediageneral.com
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