Media General is headquartered at 333 E. Franklin St. Photos by Jonathan Spiers.
Media General must feel like the prettiest girl at the dance.
Four months after announcing it was acquiring Iowa-based Meredith Corp. in a $2.4 billion deal, the downtown media firm now finds itself in a tug-of-war between that company and Texas-based Nexstar Broadcasting Group, which announced Thursday it had reached terms to acquire Media General.
Meredith responded quickly to that announcement by renewing a push for a “merger of equals” that Media General has previously rejected, according to sources familiar with negotiations. The proposal would see Media General shareholders own 50.2 percent of the combined company, with Meredith shareholders owning the remaining shares.
Nexstar’s new deal – Media General previously rejected at least two cash-and-stock offers – reflects a value of $17.66 per Media General share, plus proceeds from the pending sale of the Media General’s spectrum, or television transmission rights, in an FCC auction.
Media General, headquartered on East Franklin Street, operates or services 71 television stations in 48 markets, including local ABC affiliate WRIC. The company estimates its spectrum assets could be worth as much as $4.29 per share in after-tax value. The auction is set to begin Jan. 12.
Meredith’s proposal is valued at more than $20 per share, including proceeds from the spectrum assets auction. Shareholders would receive $14.95 per Meredith share in cash at closing, with cash proceeds totaling $685 million. The new company, to be called Meredith Media General, would pay an annual dividend starting at 68 cents per share.
While Nexstar and Media General have come to an agreement on transaction terms, an actual deal has yet to occur. The agreement is restricted by Media General’s pending merger agreement with Meredith, which Media General’s board of directors continues to recommend to shareholders.
Despite that recommendation, Media General said in a statement that it has made multiple proposals to Meredith to terminate their agreement and that Meredith has not accepted them. Without Meredith agreeing to call off the arrangement, Media General would need shareholders to vote down the deal before the acquisition by Nexstar could move forward.
The statement said Media General intends to hold a meeting as soon as possible to have shareholders vote on the Meredith deal.
“Because the Meredith-Media General merger agreement has not been terminated, there can be no assurance that any transaction with Nexstar will result (or the terms or timing thereof),” Media General’s statement says.
Nexstar has said the acquisition would create the second-largest company, behind Sinclair Broadcast Group, of major network affiliates, with 162 stations in 99 markets. That’s nearly double the number and reach that would result from the Meredith merger, which Media General has said would create the third-largest company, with 88 stations in 54 markets.
The Nexstar deal would see two Media General directors join the Nexstar board.
No decisions have been disclosed as to what presence the company would have in Richmond or what would be done with Media General’s headquarters building at 333 E. Franklin St.
In addition to that building, which totals more than 100,000 square feet of space, Media General also owns a 31,000-square-foot building at 111 N. Fourth St. That building is set to be purchased by VCU through a recently approved bond offering.
Media General is headquartered at 333 E. Franklin St. Photos by Jonathan Spiers.
Media General must feel like the prettiest girl at the dance.
Four months after announcing it was acquiring Iowa-based Meredith Corp. in a $2.4 billion deal, the downtown media firm now finds itself in a tug-of-war between that company and Texas-based Nexstar Broadcasting Group, which announced Thursday it had reached terms to acquire Media General.
Meredith responded quickly to that announcement by renewing a push for a “merger of equals” that Media General has previously rejected, according to sources familiar with negotiations. The proposal would see Media General shareholders own 50.2 percent of the combined company, with Meredith shareholders owning the remaining shares.
Nexstar’s new deal – Media General previously rejected at least two cash-and-stock offers – reflects a value of $17.66 per Media General share, plus proceeds from the pending sale of the Media General’s spectrum, or television transmission rights, in an FCC auction.
Media General, headquartered on East Franklin Street, operates or services 71 television stations in 48 markets, including local ABC affiliate WRIC. The company estimates its spectrum assets could be worth as much as $4.29 per share in after-tax value. The auction is set to begin Jan. 12.
Meredith’s proposal is valued at more than $20 per share, including proceeds from the spectrum assets auction. Shareholders would receive $14.95 per Meredith share in cash at closing, with cash proceeds totaling $685 million. The new company, to be called Meredith Media General, would pay an annual dividend starting at 68 cents per share.
While Nexstar and Media General have come to an agreement on transaction terms, an actual deal has yet to occur. The agreement is restricted by Media General’s pending merger agreement with Meredith, which Media General’s board of directors continues to recommend to shareholders.
Despite that recommendation, Media General said in a statement that it has made multiple proposals to Meredith to terminate their agreement and that Meredith has not accepted them. Without Meredith agreeing to call off the arrangement, Media General would need shareholders to vote down the deal before the acquisition by Nexstar could move forward.
The statement said Media General intends to hold a meeting as soon as possible to have shareholders vote on the Meredith deal.
“Because the Meredith-Media General merger agreement has not been terminated, there can be no assurance that any transaction with Nexstar will result (or the terms or timing thereof),” Media General’s statement says.
Nexstar has said the acquisition would create the second-largest company, behind Sinclair Broadcast Group, of major network affiliates, with 162 stations in 99 markets. That’s nearly double the number and reach that would result from the Meredith merger, which Media General has said would create the third-largest company, with 88 stations in 54 markets.
The Nexstar deal would see two Media General directors join the Nexstar board.
No decisions have been disclosed as to what presence the company would have in Richmond or what would be done with Media General’s headquarters building at 333 E. Franklin St.
In addition to that building, which totals more than 100,000 square feet of space, Media General also owns a 31,000-square-foot building at 111 N. Fourth St. That building is set to be purchased by VCU through a recently approved bond offering.