Nexstar Offers to Acquire Media General in $4.1 Billion Deal to Create TV Station Giant
A transaction would stop Media General's recently unveiled plan to buy Meredith Corp. in a $2.4 billion deal.
Nexstar Broadcasting Group said Monday it has offered to acquire fellow local TV station owner Media General in a $4.1 billion deal in an attempt to stop the latter from buying Meredith Corpration.
Nexstar chairman and CEO Perry Sook sent a letter Monday morning to Media General’s board offering $14.50 per share for the company, with $10.50 of that in cash and the rest in stock.
Media General recently unveiled a $2.4 billion deal for Meredith. Nexstar said its offer represents a premium of 30 percent to Media General’s closing stock price on Friday.
Nexstar, based in Irving, Texas, operates more than 100 TV stations in 58 markets, covering about 18 percent of U.S. TV households. Media General operates or services 71 stations.
Media General's stock dropped when it announced its deal amid shareholder criticism and suggestions that Nexstar could make a bid.
"The transaction we are proposing would be a transformational event for both Nexstar and Media General shareholders and would deliver superior, immediate and long-term value to Media General’s shareholders compared with Media General’s proposed acquisition of Meredith," said Sook. "Our proposal provides a significant premium to Media General’s shareholders, including a cash component nearly equal to Media General’s current share price."
He added: "Our proposal would also enable Nexstar and Media General shareholders to participate in the near- and long-term upside of a pure-play broadcasting company with expanded audience reach, a more diversified portfolio and a significantly stronger financial profile, including substantial free cash flow per share, led by a proven broadcast and digital media management team. Nexstar is already growing rapidly as a result of our organic and M&A [mergers and acquisitions] initiatives, but a combined Nexstar/Media General would be even better positioned for long-term success in a dynamic and consolidating market and certainly better positioned to deliver shareholder value than a combined Media General/Meredith."