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.