Nexstar Broadcasting Group got a boost in the battle for the hearts and minds of Media General shareholders on Friday, after Media General filed documents with the Securities and Exchange Commission that said despite Meredith’s higher offer, it was “not competitive” with Nexstar’s earlier proposal.
Nexstar and Media General announced Jan. 7 they reached an agreement where Nexstar would purchase the smaller broadcaster in a cash and stock deal valued at $4.7 billion, or $17.66 per share. But that deal was contingent on Media General canceling an earlier deal it had to purchase Meredith Corp. for $2.4 billion.
Shortly after Nexstar and Media General made their announcement, Meredith countered with its own proposal to buy the broadcaster in a deal valued at more than $20 per share. Meredith also claimed that its proposal had a better chance of passing regulatory muster. The combined Meredith-Media General would have 88 stations across the country, giving it access to about 30% of the TV homes across the country and well below the Federal Communications Commission’s 39% ownership limits. A Nexstar-Media general combination would have 162 stations across the country, or roughly 39% of total TV homes. Both Nexstar and Media general have said they would divest some stations.
In an S-4 document filed with the SEC on Friday, Media General said its board of directors had reviewed the Meredith offer and deemed it “not competitive with Media General’s proposed transaction construct with Nexstar.”
Media General would have to pay Meredith a $60 million breakup fee if their deal is terminated. And the company has said it would give Meredith “first look” at 11 broadcast stations it believes it would have to divest to obtain regulatory approval of the Nexstar merger.
Meredith declined comment, but in its press release Thursday, Meredith chairman and CEO Stephen Lacy said he was “confident that the combination of Meredith and Media General will generate superior value over both the near- and long-term, particularly when compared to the unsolicited offer Nexstar Broadcasting Group has made for Media General."
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