Thursday, January 07, 2016

KSN parent company agrees to buy 71 stations

Nexstar Broadcasting, which owns KSNF and manages KODE in Joplin, announced today that it has reached an agreement to buy Media General, which owns 71 television stations in 48 markets, including  The deal has not been finalized because of an ongoing effort by Meredith Corporation to buy the company. Media General shareholders rejected the Meredith deal.

Today's news release from Nexstar Broadcasting is printed below:

Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) today announced that it has completed the negotiation of terms for a transaction with Media General, Inc. (NYSE:MEG) under which Nexstar would acquire Media General for $10.55 per share in cash and 0.1249 of a share of Nexstar Class A common stock for each Media General share. In addition, the terms contemplate additional consideration to Media General shareholders in the form of a contingent value right ("CVR") for each Media General share entitling Media General shareholders to net cash proceeds as received from the sale of Media General's spectrum in the FCC's upcoming spectrum auction. The negotiated transaction reflects a value of $17.66 per Media General share based on Nexstar’s closing share price on January 6, 2016, plus the value of the CVR.

Nexstar looks forward to signing a definitive agreement with Media General as soon as Media General’s transaction with Meredith Corporation (NYSE: MDP) has been terminated by either party or following a Media General shareholder vote in which the Media General/Meredith transaction is not approved. Nexstar noted that the form of merger agreement between Nexstar and Media General has already been fully negotiated.

Perry Sook, Chairman, President and CEO of Nexstar, said, “We are pleased to have negotiated these transaction terms with Media General as we believe the combination would be a transformational event that enables both companies’ shareholders to participate in the near- and long-term upside of a pure-play broadcasting company with expanded audience reach, a more diversified portfolio and a significantly stronger financial profile, led by a proven broadcast and digital media management team.”

Mr. Sook continued, “We are confident that a combined Nexstar / Media General would be strongly positioned for long-term success in a dynamic and consolidating broadcast market. Specifically, the combined company would be highly attractive to programmers and advertisers alike, while the anticipated year-one synergies of $76 million and generation of over $500 million of annual free cash flow will enhance long-term shareholder returns.”

Nexstar also noted that it intends to divest the TV stations necessary to obtain FCC regulatory approval of the proposed transaction. In addition, two Media General directors would join the Nexstar Board of Directors at closing.

The negotiated transaction would not be subject to any financing condition. Nexstar has worked with banks willing to provide commitment letters for approximately $4.7 billion in financing in support of the transaction as soon as the negotiated merger agreement is executed.

Nexstar will file a Form 8-K with the Securities and Exchange Commission, which will include the form of merger agreement negotiated between Nexstar and Media General.

BofA Merrill Lynch is acting as financial advisor and Kirkland & Ellis LLP is acting as legal counsel to Nexstar in connection with the proposed transaction.

Because the Meredith-Media General merger agreement has not been terminated, there can be no assurance that any transaction with Media General will result (or the terms or timing thereof).

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