Starboard Urges Media General to Negotiate Deal With Nexstar
September 29 2015 - 12:40PM
Dow Jones News
Activist investor Starboard Value LP urged Media General Inc. to
negotiate the best possible deal with Nexstar Broadcasting Group
Inc. within the bounds of its pending agreement to acquire Meredith
Corp., a move Starboard still opposes.
In a letter Tuesday to Media General Chairman J. Stewart Bryan
III, Chief Executive Vincent L. Sadusky and the company's board,
Starboard also warned it was prepared to take necessary steps,
including a possible proxy fight, to ensure the outcome is in the
best interests of shareholders and that the company doesn't act to
prevent shareholders from voting on any potential transaction.
The letter comes a day after Nexstar offered roughly $1.8
billion for Media General, in a move that potentially could scuttle
the pending deal for Meredith.
A Media General spokesman didn't have an immediate comment.
Starboard, which has a stake of roughly 4.5% in Media General
and is one of its biggest shareholders, said it believes a
"combination of Nexstar and Media General is highly strategic." The
activist investor also said it would vote its shares against the
Meredith deal, even before considering Nexstar's offer.
Starboard also said it was surprised that Nexstar previously
made a private offer in August and expressed concern Media General
had refused a chance to negotiate a possible deal with Nextar.
Media General earlier this month agreed to acquire Meredith for
about $2.4 billion in cash and stock, continuing a trend of
consolidation in the U.S. broadcast industry as local TV stations
look for negotiating leverage against large cable and satellite
providers. Meredith is known for magazines such as Better Homes
Gardens and Family Circle, but its 17 local TV stations are the
centerpiece of the pending deal.
Nexstar, based in Irving, Texas, has a portfolio of more than
100 TV stations in 58 markets, covering about 18% of U.S.
television households. Media General operates or services 71
stations.
Nextar recently traded at $45.48, up 4.5%. Media General rose
1.5% to $13.85, and Meredith fell 38 cents to $43.05.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 29, 2015 12:25 ET (16:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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