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Nexstar, Media General Agree On Merger Terms, But Meredith Won’t Go Away

After a somewhat unorthodox courtship. Nexstar Broadcasting and Media General Inc. are set to merge – but they’ll have to spurn another suitor to get the deal done.

Nexstar has for weeks made a concerted effort to disrupt a previous deal established between Media General and Meredith Corp., telling investors that its deal for the Richmond, Virginia, TV station owner would be more advantageous than one proposed by Meredith, the Des Moines, Iowa company that owns TV stations and a broad array of popular magazines.

Under the terms of the proposed deal, Nexstar would acquire Media General for $10.55 per share in cash and 0.1249 of a share of Nexstar Class A common stock for each Media General share. Media General shareholders would also gain a right to share in some of the money from a sale of the company’s spectrum at FCC auction, estimated to be worth up to $4.29 a share.

“We are confident that a combined Nexstar / Media General would be strongly positioned for long-term success in a dynamic and consolidating broadcast market,” said Perry Sook, Nexstar’s president and CEO, in a prepared statement. “Specifically, the combined company would be highly attractive to programmers and advertisers alike.”

But Meredith on Thursday proposed a sweetening of terms, offering what it called “a merger of equals.” Under Meredith’s new proposal, Media General shareholders would get $3.90 a share in cash; one share of the new company for every share of Media General; and the potential right to up to $4.29 per share after taxes when Media General spectrum holdings are sold at FCC auction. Media General shareholders would also control 50.2% of the new company, Meredith said.

Nexstar said in a statement Thursday that it “looks forward to signing a definitive agreement with Media General as soon as Media General’s transaction with Meredith Corporation has been terminated by either party or following a Media General shareholder vote in which the Media General/Meredith transaction is not approved.”  The company also noted its proposed pact with Media General “has already been fully negotiated.”

The to-and-fro highlights the popularity of TV stations as a media asset, even as new technology upends the way the media industry does business. At a time when consumers can gain access to their video favorites without relying on a traditional broadcaster, TV stations have continued to remain desirable.

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 and able to enjoy revenues from distribution via cable and broadband.


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