Media General announced this morning it will negotiate with Nexstar Broadcasting, after all.
The station group said “after careful review and consideration, and in consultation with its independent legal counsel and financial advisors,” it will talk to Nexstar about its unsolicited proposal even though it “significantly undervalues” Media General.
Among other matters, the Proposal substantially discounts Media General’s standalone growth prospects, ignores the significant asset value embedded in Media General’s excess spectrum that can be monetized via the upcoming Broadcast Auctions, and does not reflect an equitable share of the synergies outlined in the Proposal made by Nexstar. Media General and its advisors intend to engage in private negotiations with Nexstar and note that there are no guarantees that these negotiations will result in a transaction with Nexstar.
“We are eager to move forward with discussions with Media General regarding our proposal, while at the same time maintaining our financial discipline. It is evident since our initial announcement that Media General and Nexstar shareholders recognize the compelling strategic and financial value that a Media General-Nexstar combination presents for both companies and our respective shareholders,” Perry Sook, chairman, president and CEO of Nexstar said in a statement. “We are surprised that Media General’s Board considers the value of our proposal to be inadequate today, however, we are willing to engage with them to hear their perspectives. We believe our proposal will deliver superior, immediate and long-term value to Media General shareholders compared with any alternatives available to the company.”
Media General is currently in talks to buy Meredith for $2.4 billion. Meredith gave Media General permission to speak to Nexstar after it offered $4.1 billion for Media General in a bid to stop the Meredith deal.
Last week, one of Media General’s investors came out against the Meredith deal and said the station group was “dragging its feet” in responding to Nexstar’s proposal.