Media General to Begin Merger Talks With Nexstar
November 16 2015 - 10:00AM
Dow Jones News
TV-station operator Media General said Monday it was opening
merger negotiations with Nexstar Broadcasting Group Inc., even as
it has another deal in place to combine with Meredith Corp.
At the same time, Media General said it has rejected Nexstar's
previous unsolicited proposal because it "significantly"
undervalued Media General and the company added that entering talks
didn't guarantee that a deal would be struck.
The rejected proposal valued the Richmond, Va., company at about
$1.85 billion, which equaled a premium of 30% over Media General's
closing price on Sept. 25 of $11.15. Including Media General's
debt, it is worth some $4.1 billion.
The Media General board added that it continues to back the deal
with Meredith. In September, Media General agreed to buy Meredith
Corp. in a deal valued at $3.1 billion. Media General said that it
was allowed to pursue talks with another company under its
agreement with Meredith.
Media General, which operates 71 television stations across the
country, has been under pressure from activist investor Starboard
Value LP to begin negotiations with Nexstar. Starboard in September
revealed a 4.5% stake in Media General and said it was willing to
launch a proxy fight if a deal with Nexstar wasn't explored.
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. Combining Nexstar and Media General would
create a pure-play broadcast company owning or providing services
to 162 stations in 99 markets, reaching 39% of U.S. television
homes, Nexstar has said.
There has been a wave of consolidation in the U.S. broadcast
industry, as local TV stations seek to maintain or increase
negotiating leverage with big cable and satellite providers, many
of whom themselves are striking combinations.
Meredith is known for magazines such as Better Homes &
Gardens and Family Circle. But its 17 local TV stations are the
centerpiece of the Media General deal. Meredith Media General, as
it would be known, would encompass 88 stations reaching 30% of U.S.
households, or 34 million homes.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 16, 2015 09:45 ET (14:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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