Meredith Thinking About Kicking In Cash to Seal Media General Deal

By Kevin Eck 

The New York Post is saying Meredith Corporation is considering “kicking in cash” to win over the Media General board.

The Post reports Meredith is going to offer a new deal in the next few weeks to compete with Nexstar’s unsolicited offer. The original plan had Media General buying Meredith for $2.4 billion in cash and stock, that is until Nexstar offered $1.9 billion for Media General.

The tug-of-war over Media General comes as local TV stations seek to increase their leverage in negotiations with cable and satellite providers over so-called “retransmission fees.”

When broadcasters merge, the buyer can apply its higher retransmission fees to the acquired stations — instantly boosting profits.

Media General charges higher retrans rates than Meredith. A combination would allow the merged company to add roughly $30 million in such fees.

A deal can be structured in which Media General is the acquirer but Meredith provides cash to Media General shareholders.

One possibility is for Meredith to offer a special dividend to Media General just prior to the merger closing that would be contingent on the deal’s completion.

Meredith told TVSpy it had no comment about the Post report.

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