Perry Sook’s Nexstar Media Group is expected to announce Monday that it will acquire Tribune Media for more than $4 billion, creating the country’s largest broadcast group.
After completing the purchase Nexstar would top Sinclair Broadcast Group, which last year agreed to acquire Tribune for $3.9 billion, only to have the deal fall apart in August with both sides filing lawsuits against the other.
That came after the FCC designated the Sinclair-Tribune deal for hearing with questions over how Sinclair chose to spin off stations.
After the Sinclair deal was aborted, speculation resumed about who would buy Tribune, Reports focused on Nexstar and private equity firm Apollo Global Management.
Nexstar won the bidding with an all-cash offer of $46.50 a share, according to a source familiar with the situation.
Tribune owns 42 stations reaching about 39% of the country with outlets in New York, Los Angeles and Chicago.
It also owns cable network WGN America and a stake in Food Network.
The acquisition of Tribune by Nexstar would have to be approved by the Department of Justice and the Federal Communications Commission.
Sook in 22 years has already built Nexstar into a giant with 171 TV stations.
“Through accretive transactions, we've strategically assembled a highly effective local broadcast and digital platform that delivers exceptional local content to inform and entertain our viewers, while providing premium local advertising opportunities at scale for advertisers and political campaigns,” Sook said during the company’s third quarter earnings call on Nov. 8.
“Our development of complementary revenue streams of retransmission and digital revenue have materially diversified Nexstar's revenue mix. And we continue to focus on implementing new standards and technologies to monetize the unrivaled reach, trust and influence of our leading local platforms,” Sook said. “These are the drivers of our near-term and long-term financial growth, and they have positioned Nexstar to continue to complete select accretive M&A, to reduce our leverage and to aggressively return capital to shareholders.”
Tribune reported strong earnings for the third quarter, its first report after the Sinclair deal fell through. But analysts thought the company was still in play.
“Tribune stepped back into the public market spotlight as an independent company at a good time - political revenues are brimming to new levels, the retrans outlook for broadcast assets remains robust; even core advertising results are trending better than expected," said analyst Clay Griffi of Deutsche Bank after Tribune’s third-quarter earnings were announced in November. “We still think several players within the industry, as well as several outside view Tribune as a highly attractive acquisition candidate.”
"Nexstar is very well suited to absorb the Tribune stations," said Adonis Hoffman, chairman of Business in the Public Interest and former chief of staff to Democratic FCC Commissioner Mignon Clyburn. "One of the key reasons Nexstar succeeded was the respect Tribune has for the Nexstar corporate culture and the synergy between management. Given Nexstar's sterling record, the regulatory approval process should not be too complicated, even with the divestitures."
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.