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Media General, Nexstar Start Merger Talks

Media General has started merger discussions with Nexstar Broadcast Group,  but added that the broadcaster’s $15.70 per share offer is still too low.

Media General had planned to acquire broadcast and print media giant Meredith in a deal valued at $2.4 billion, but Nexstar, one of the largest independent broadcasters in the country, lobbed in an offer for Media General valued at $4.1 billion.

Nexstar increased that offer on Nov. 13 to $15.70 per share, a 41% premium to media General’s stock price on Sept. 25. But only 2% better than its $15.36 per share price on Nov. 12. Media General stcok was down 3 cents each (0.19%) to $15.43 per sahre in afternoon trading Monday. 

Media General had said it believed its Meredith transaction was the better deal, but some of its larger shareholders had chafed at Meredith’s print assets. Meredith owns iconic women’s magazines like Parents and Better Homes & Gardens.

In a statement, Media General said  its board of directors rejected the latest Nexstar offer, adding that “substantially discounts” its standalone growth prospects, doesn’t consider the value of its excess spectrum in upcoming federal auctions. “Media General and its advisors intend to engage in private negotiations with Nexstar and note that there are no guarantees that these negotiations will result in a transaction with Nexstar,” Media General said in the statement.

A Media General/Nexstar merger would create a formidable No. 2 player in the market – at 162 stations, it would be second only to Sinclair Broadcast Group.

 “We are eager to move forward with discussions with Media General regarding our proposal, while at the same time maintaining our financial discipline,” Nextsar CEO Perry Sook said in a statement. “It is evident since our initial announcement that Media General and Nexstar shareholders recognize the compelling strategic and financial value that a Media General-Nexstar combination presents for both companies and our respective shareholders. We are surprised that Media General’s Board considers the value of our proposal to be inadequate today, however, we are willing to engage with them to hear their perspectives.  We believe our proposal will deliver superior, immediate and long-term value to Media General shareholders compared with any alternatives available to the company.”

Meredith also issued a statement Monday that it believes its Media General deal will prevail.  

"Meredith's Board of Directors still unanimously agrees that the merger agreement reached with Media General as currently structured is in the best interests of shareholders," said Meredith chairman and CEO Stephen Lacy in a statement.  "Enhancing Meredith shareholder value will remain our top priority as we move forward in this merger process."