— The drama involving Media General, Nexstar and
Meredith unfolded in successive press releases Thursday morning that read as if the bride
switched grooms on the fly. The upshot is that Nexstar and Meredith want to marry, and Meredith will get $66 million if it lets them. The flurry of press releases also confirmed that Nextstar and Meredith plan to participate in the spectrum incentive auction.
Meredith and Nexstar have been courting Media General since last fall in one of the most push-pull merger deals yet in broadcasting. In
mid-September, Media General agreed to merge with Meredith in a deal
valuing Meredith at $2.4 billion, and creating a group of 88 TV stations in 54
markets reaching 30 percent of U.S. TV households.
Two weeks later, Nexstar swooped in with an unsolicited $4.1 billion offer for
Media General, urging it to pull out of the “value-destructive” deal with
Meredith. (See “Media
General to Consider Nexstar's $4.1 Billion Bid,” Sept. 28, 2015
combined Nexstar and Media General comprised 162 TV stations in 99 markest
reaching 39 percent of U.S. TV households.
to let Media General parse Nexstar’s offer, but it refused to step aside.
Meanwhile, Media General came back to Nexstar in early December and told it to
do better than its initial offer of $10.50 a share. Based on Nexstar’s share
price at the time, Media General said $16.31 was more like it, and closer to
the $17 per share offer Nexstar laid on the table in August that Media General
Nexstar wasn’t budging, according to Media General:
“Nexstar refuses to properly price the combination and materially
improve its view on value,” read the Dec. 9 Media General statement.
It said the board remained “open to discussing and reviewing an improved
proposal from Nexstar,” but that it was “unclear
from Nexstar’s press release if its current proposal is indeed its best and
final proposal,” and that the board continued to recommend “the proposed transaction
Cut to Thursday, Jan. 7, shortly after 9 a.m. Eastern.
Media General announces that Nexstar is acquiring it for a cash-share
equivalent of $17.66 per share, plus a “contingent value right” for spectrum
sold at auction. (Confirming Media General’s intention to participate. The deadline for doing so is next Tuesday.) Media
General shareholders would get 33.4 percent of outstanding Nexstar shares.
But only if the Meredith agrees: “Because the Meredith-Media General merger
agreement has not been terminated, there can be no assurance that any
transaction with Nexstar will result (or the terms or timing thereof).”
Meanwhile, Meredith cancels it planned participation in the Citi 2016 Internet,
Media & Telecommunications Conference in Las Vegas, a who’s who of sector
CEOs and senior executives, analysts and business reporters. No reason was
given, just a litany of Meredith assets—17 owned or operated stations reaching
11 percent of U.S. households, seven in the top 25 markets, 650 hours of local
news produced, etc. Plus, a note about having paid a dividend for “68 straight
years and increased it for 22 consecutive years.”
It quickly followed with a proposed “merger of equals” that it said valued
Media General shares at $20, or $3 more than Nexstar, plus the spectrum bonus plus
Wells Fargo’s Marci Ryvicker boiled down the basics:
“As far as Nexstar and Media General are concerned, their deal is negotiated;
there is really no more discussion to be had,” she wrote in an analyst’s note.
“Both companies can
to participate in the incentive
Further, she said, Nexstar was expected to file a merger agreement with the FCC
on the day of the announcement, Thursday, Jan. 7.
In the meantime, Meredith’s proposal has to get past a vote by its
shareholders, presumably next month. If they turn it down, Meredith gets a $60
million break-up fee if and Nexstar gets Media General.