Nexstar Broadcasting says Media General’s Board of Directors has rejected its latest proposal, currently valued at $16.31 per Media General share based on Nexstar’s closing share price on Dec. 8, to buy the station group.
Nexstar’s revised offer also included giving Media General shareholders cash based on profits made off the sale of its spectrum in the upcoming auctions.
Media General responded with a counter proposal consisting of $11.00 per share in cash, an exchange ratio of 0.135 Nexstar shares per Media General share and the CVR. Excluding the value of the CVR, the current value of Media General’s counter proposal is $18.61 per Media General share, representing a premium of approximately 66.9% over Media General’s closing share price on September 25 and an enterprise value multiple of approximately 10.6x Media General’s projected blended 2015/2016 EBITDA.
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Nexstar president and CEO Perry Sook called Media General’s counter-proposal “unreasonable.”
“Despite strong support from Media General shareholders for our past proposals, we have reached an impasse in our negotiations to acquire Media General as their Board has again rejected our very compelling offer and responded with an unrealistic counter proposal,” said Sook. “The response from Media General is disappointing as our revised offer reflects our recent confirmation of our projections for first year synergies and our continued focus on structuring a transaction that would enable the combined company to generate prodigious free cash flow that would be allocated for leverage reduction, additional strategic investments and the return of capital to shareholders.”