Nexstar sent a letter to Media General’s board of directors Monday morning offering $14.50 a share for the company. The offer includes $10.50 in cash and 0.0898 Nexstar shares for each Media General share, according to the letter.
“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 Nexstar Chairman and Chief Executive Perry Sook in a statement.
Earlier in September, Media General agreed to buy Meredith for about $2.4 billion in cash and stock. The deal must be approved by shareholders of both companies and would be valued at about $3.1 billion including debt.
The move reflects a growing wave of consolidation among owners of TV stations. In 2013, Gannett bought up TV stations owned by Belo Corp., while Tribune put into place a $2.7 billion acquisition of Local TV Holdings. Many of the companies are jettisoning newspapers in order to focus more strongly on broadcast stations, which are thought to have strong ties to local markets while able to enjoy revenues from distribution via cable and broadband.
Nexstar owns and operates 107 television stations in 58 markets, giving it reach into around 18% of U.S. households. That number could grow. If some recently announced transactions are completed, Nexstasr would own and operate 114 television stations. Nexstar recently unveiled an agreement to purchase four North Dakota television stations for $44 million.
Media General sold a large part of its newspaper holdings to Warren Buffett’s Berkshire Hathaway in 2012 and last year announced a deal to buy broadcaster LIN Media for $1.6 billion. The Meredith deal as sketched out by the suitors would create a combined company with 88 stations in 54 markets that could reach about 30% of U.S. households.