Nexstar Broadcasting Makes Bid to Acquire Media General, Dissuades MG from Acquiring Meredith
Media company Nexstar Broadcasting is making a bid this morning to acquire Media General.
Nexstar Founder, President, and Chief Executive Officer Perry A. Sook sent a letter this morning to Media General Chairman J. Stewart Bryan, III and President and CEO Vincent L. Sadusky, and then posted it on their website, the former expressing concern over the latter's apparent surprise revelation that they were attempting to purchase Meredith Corporation, a move that Sook calls a "...value-destructive agreement." Nexstar trades on the NASDAQ under the symbol NXST. The Meredith Corporation, which owns seventeen local television stations, is best-known for its women's network magazines, including Better Homes and Gardens.
In a written release associated with the announcement Sook says, "The transaction we are proposing would be a transformational event for both Nexstar and Media General shareholders and would deliver superior, immediate and long-term value to Media General’s shareholders compared with Media General’s proposed acquisition of Meredith."
Nexstar proposes an acquisition price valued at approximately $14.50 per Media General share. Sook's letter also asserts that the combination of Nexstar and Media General forces would create "...the #2 owner of major network affiliates and a pure-play broadcast operator that owns, operates, programs or provides sales and other services to 162 stations in 99 markets, reaching 39% of all U.S. television households."
Media General has responded with a release of its own which includes the following:
"Consistent with its fiduciary duties, the Media General Board of Directors, in consultation with its legal and financial advisors, will carefully review and consider the proposal to determine the course of action that it believes is in the best interests of the Company and its shareholders. Media General shareholders are advised to take no action at this time. Media General will have no further comment on the proposal until the Board has completed its review.
As previously announced on September 8, 2015, Media General entered into a definitive merger agreement with Meredith Corporation (NYSE:MDP; www.meredith.com), under which Media General will acquire all of the outstanding common stock of Meredith in a cash and stock transaction to create a powerful new multiplatform and diversified media company to be known as Meredith Media General. The Board of Directors of Media General continues to recommend the proposed transaction with Meredith."
By joining forces with Meredith, Media General would become the number three owner of major network affiliates in the United States, according to the proposal provided by Nexstar.
The proposed moves are in line with an industry trend toward consolidation as broadcasters and streaming services look to make the most of online content and fill gaps that have resulted from declines in revenue in the traditional publishing industry. Note that the definition of what is considered to be "traditional publishing" is changing as fast as the industry itself.
[EDITOR'S NOTE: Townsquare Media property WIBX's "WIBX First News with Keeler in the Morning" is simulcast on WFXV-TV (Fox 33), a Nexstar Broadcasting Group property.)