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Nexstar Broadcasting has entered into a definitive agreement to buy Media General for a total of $4.6 billion.
The new company will be called Nexstar Media Group. As part of the deal, Nexstar will acquire all outstanding shares of Media General for $10.55 a share and 0.1249 of a share of Nexstar Class A common stock for each Media General Share. The agreement also allows for a CVR or contingent value right that lets Media General shareholders to profit from the sale of Media General’s spectrum in the upcoming auction.
The agreement comes after Meredith agreed to back out for $60 million. Meredith also gets the opportunity to negotiate to buy certain broadcast and digital assets currently owned by Media General.
“The acquisition of Media General’s broadcasting and digital media assets represent a transformational growth opportunity for Nexstar and is strategically and financially compelling,” said Perry Sook, chairman, president and CEO of Nexstar. “We intend to implement our proven strategy of focusing on local programming and effective digital media marketing solutions across the assets being acquired and will marry best of breed practices from our existing operations with those from Media General.”
“We are pleased to reach this agreement with Nexstar, which provides Media General shareholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company,” said Vincent L. Sadusky, president and CEO of Media General. “Together with Nexstar, we can deliver a more comprehensive, integrated and competitive offering across all markets for the benefit of our advertisers and brands. I am thankful for the hard work and dedication of our talented employees, and I’m confident they will continue to make many valuable contributions as part of a larger and stronger organization. I look forward to working closely with the Nexstar team to bring our companies together to realize the power of this compelling combination and ensure a smooth transition.”
At around 8:45 this morning, Meredith announced it was backing out of the deal.
“While we still believe in the strategic and financial benefits a merger with Media General would have created, we are pleased with the financial benefits of the termination agreement and the shareholder value created,” said Meredith Chairman and CEO Stephen M. Lacy. “Meredith is a strong and growing company with a powerful and diverse media portfolio. We have a successful record of delivering increased Total Shareholder Return, and look forward to enhancing our financial and competitive position with the benefits received.”
“We are pleased to have this matter behind us and look forward to working towards completion of our transaction with Nexstar, which we believe is in the best interest of Media General and delivers superior value to our shareholders,” said Media General’s Vince Sadusky.