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NEW YORK — Shares of TV station owner Nexstar Broadcasting Group Inc. jumped 22.4% on Thursday after the company said its board has hired Goldman, Sachs & Co. to assist it in reviewing strategic alternatives, including a sale of the broadcaster.
Nexstar’s stock soared to three-year highs, hitting $13.59 in intra-day trading before closing at $13.33, giving it a $378.6 million market capitalization, according to Yahoo Finance. The stock’s previous 52-week high was $12.65.
“The company does not intend to comment further publicly with respect to this process until its completion,” Nexstar said in a statement Thursday morning.
Wall Street observers suggested that the company could easily find a buyer for a price of $15 or more per share.
For example, RBC Capital Markets analyst David Bank said in a report that the broadcaster could fetch at least $15 per share in an outright takeover. He raised his price target on the stock from $11 to $13.
Bear Stearns analyst Victor Miller was even more bullish on a potential transaction, saying Nexstar could clinch a $15-$20 per-share deal and upgrading its shares from “peer perform” to “outperform.”
“Nexstar has been in a prolonged acquisition mode and has never been able to sell a property,” Miller wrote in his note to investors. “But this change of heart should pay off for shareholders.”
Nexstar had been in the running to acquire the TV stations owned by radio giant Clear Channel Communications, which in the end went to private equity powerhouse Providence Equity Partners.
If Nexstar was sold for a multiple in line with the one Clear Channel fetched for its stations, the stock’s value would amount to $26 a share, according to Miller.
Irving, Texas-based Nexstar operates, programs or provides services to 49 TV stations in 29 markets. Its assets are in New York, Texas, Illinois, Pennsylvania, Maryland, Indiana, Missouri, Montana, Louisiana, Arkansas and Alabama. Its stations include affiliates of CBS, Fox, ABC, NBC, the CW and MyNetworkTV.
Reuters contributed to this report.
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