Gray Television is acquiring Meredith Corp.’s local media group, which owns 17 TV stations, in a deal worth $2.7 billion.
Gray currently operates in just one of the markets where Meredith owns stations. Gray plans to divest its station in the Flint, Michigan, market, WJRT-TV by the time the deal closes to meet regulatory requirements.
With the divestiture of WJRT, Gray says the deal will need no FCC waivers to complete. It will reach 25% of TV households, under the 39% ownership cap, given the way it is calculated by the FCC.
But the FCC, currently headed by a Democrat who has been no fan of media consolidation, will still give the deal the requisite review of whether the merger is affirmatively in the public interest, a test that goes beyond whether the deal does not violate any rules.
The translation, when completed, will make Gray the second largest broadcast group in terms of revenue, the company said.
“The television station portfolios, company cultures, and commitments to localism of Gray and Meredith are highly complementary. We are very excited to acquire Meredith’s excellent television stations, and we look forward to welcoming its employees into the Gray family,” said Gray CEO Hilton H. Howell Jr.
”Moreover, Gray’s Board and shareholders are deeply appreciative of the tireless efforts of our team led by Kevin Latek and Jim Ryan on this transaction and our other recently announced significant transactions,” Howell added. “Building on our successes throughout 2020 and just the first few months of 2021, Gray Television clearly has an even stronger and brighter future than ever!”
When Gray finishes pending acquisitions and divestitures, its stations will operate in 113 markets reaching 36% of U.S. TV households, it said.
Gray will acquire all outstanding shares of Meredith for about $14.50 per share in cash. Immediately before closing the transaction, Meredith will spin off its national media group to its existing shareholders.
The deal is expected to close in the fourth quarter.
The Meredith stations Gray is buying are WGCL and WPCH, Atlanta, Georgia; KPHO/KTVK, Phoenix, Arizona; KPTV/KPDX, Portland, Oregon; KMOV, St. Louis, Missouri; WSMV, Nashville, Tennessee; WFSB, Hartford-New Haven, Connecticut; KCTV/KSMO, Kansas City, Missouri; WHNS, Greenville-Spartanburg, South Carolina; KVVU, Las Vegas, Nevada; WALA, Mobile, Alabama; WNEM, Flint-Saginaw, Michigan; and WGGB/WSHM-LD, Springfield, Massachusetts.
Gray said it expects that the Meredith transaction will be “significantly accretive” to free cash flow per share. Gray has identified an estimated $55 million in synergies annualized for the first full calendar year following the closing.
-- With John Eggerton
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