Nexstar Offers To Buy Media General In $4.1 Bln Deal

(RTTNews) - Diversified media company Nexstar Broadcasting Group, Inc. (NXST) proposed Monday to acquire television stations owner Media General, Inc. (MEG) for $14.50 per share in a cash and stock deal valued at $4.1 billion, including assumption of Media General's debt.

"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," Nexstar Chairman, President and CEO Perry Sook said.

The proposed deal will see Media General shareholders receiving $10.50 per share in cash and a fixed ratio of 0.0898 Nexstar shares per Media General share. Media General shareholders will own 26 percent of the combined entity at closing.

The offer price represents a 30 percent premium over Media General's closing share price of $11.15 on September 25. The proposed deal will create a leading pure-play broadcaster with enhanced scale and substantial free cash flow.

Nexstar said the proposed combination would be well positioned to deliver superior immediate and long-term shareholder value compared to the proposed combination of Media General with Meredith Corp. (MDP).

Media General agreed on September 8 to acquire all of the outstanding common stock of diversified media company Meredith in a cash and stock deal valued at about $2.4 billion or about $3.1 billion, including Meredith's net debt balance of $772 million.

"Given the compelling strategic and financial value of a combination, it is illogical that Media General's Board has refused to engage with us and has instead pursued an ill-conceived and value-destructive acquisition of Meredith that would once again expose Media General shareholders to the risks of the low-margin publishing business," Sook added.

Nexstar said the combined Media General/Nexstar entity will own 162 stations in 99 markets reaching 39 percent U.S. TV households, compared to 88 stations in 54 markets that will be owned by the Media General/Meredith combination reaching 30 percent U.S. TV households.

The Media General/Nexstar combination is expected to generate total synergies of $75 in year one, while the Media General/Meredith combination is expected to generate total synergies of $60 in year one.

Nexstar noted that it is looking forward to engage in dialog with the financial community regarding the superior merits of its proposed transaction with Media General. The company added that it has been attempting for many months to enter into substantive negotiations.

NXST closed Friday's regular trading session at $44.52, down $1.76 on a volume of 0.36 million shares, while MEG closed at $11.15, down $0.31 on a volume of 1.46 million shares.