Meredith has granted Media General a waiver to conduct due diligence on Nexstar’s unsolicited offer and has promised to sweeten the pot.
In its press release, Meredith says its deal is “superior” to Nexstar’s offer, adding, “Meredith believes this analysis will confirm that a Meredith–Media General combination is in the best interest of both companies’ shareholders.” As part of its confidence play, Meredith is upping the “estimated synergies” for the merger to $85 million from its original $80 million.
“We look forward to exchanging information with Media General and to promptly reaching agreement on a transaction that is in the best interests of our respective shareholders,” Perry A. Sook, Nexstar chairman, president and CEO said. “Since we made our proposal, many Media General shareholders have expressed their support for our proposed combination. The market has reacted favorably and currently values our proposal at $15.00 per Media General share, a premium of approximately 35% over Media General’s share price on the trading day prior to our offer. We believe our proposal is a superior offer to the Meredith-Media General transaction and that the market understands how strategically and financially compelling this combination is for the shareholders of both companies. ”
Meredith also spelled out the strengths of its proposed merger with Media General:
The new Meredith Media General will be a diversified, multiplatform media company with a strong financial position, unmatched content creation capabilities, deep consumer insights and data, and expansive reach. Its compelling attributes include:
A powerful competitor in the media industry with $3 billion in revenues, over $920 million of EBITDA, and at least $1 billion in pro-forma cumulative free cash flow in the first two calendar years post-closing.
Best-in-class capital stewardship, including a disciplined capital allocation plan that balances investments in the business with returning cash to shareholders via dividends and share repurchases.
More than 80 television stations across 54 markets that reach 30 percent – or approximately 34 million – U.S. TV households. These high-quality local broadcast assets will include 25 Big Four network-affiliated TV stations in the Top 50 DMAs, making Meredith Media General the largest owner of Big Four stations in Top 50 markets.
A powerful digital platform reaching over 200 million monthly unique visitors via a combination of leading national and local consumer sites and business-to-business digital capabilities in key growth sectors such as content, mobile, social, video and native advertising.
Leading multiplatform national media brands with a top female reach of 100 million unduplicated American women and over 60 percent of U.S. Millennial women across multiple platforms including print, digital, mobile, video and brand licensing.
The new Meredith Media General will also be positioned for long-term growth in the media industry:
Meredith Media General’s 30 percent TV household reach provides for further expansion in the television space, as it is well below the government-mandated 39 percent ownership cap. A Nexstar-Media General combination puts it at, or possibly above, the ownership cap.
Meredith Media General will possess a powerful digital business with projected first-year revenues of approximately $500 million, with tremendous growth potential. Meredith has an established and profitable digital business and is well-positioned to maximize opportunities inherent in Media General’s current digital activities.
Meredith Media General will build on Meredith’s success in generating revenues not dependent on advertising via its high-margin brand licensing and its nationally recognized and profitable marketing services businesses.