Nexstar To Acquire Tribune In $6.4 Billion Deal

Transaction will make Nexstar the largest owner of local TV stations, reaching 39 percent of U.S. TV households
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DALLAS—Nexstar Media Group will acquire Tribune Media, making it the country’s largest owner of local television stations, in a deal valued at $6.4 billion (cash and debt assumption) under the terms of a definitive merger agreement announced today.

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Nexstar will pay $46.50 per share of Tribune stock in cash as well as assume the media company’s outstanding debt. The agreed to share price represents a 15.5 percent premium over the closing price of Tribune shares on Nov. 30 and a 45 percent premium since July 16 when FCC Chairman Ajit Pai announced his intention to circulate a Hearing Designation Order regarding Sinclair Broadcast Group’s planned acquisition of Tribune and divestiture of certain stations.

“Nexstar has long viewed the acquisition of Tribune Media as a strategically, financially and operationally compelling opportunity that brings immediate value to shareholders of both companies,” said Perry Sook, Nexstar Chairman, President and CEO. “We have thoughtfully structured the transaction in a manner that positions the combined entity to better compete in today’s rapidly transforming industry landscape and better serve the local communities, consumers and businesses where we operate.”

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The deal brings together two media organizations with complementary national coverage. If approved by regulators, the combined company will reach about 39 percent of U.S. television households, Nexstar said.

Tribune’s media assets include 42 owned and operated TV stations in major U.S. media markets, a general entertainment cable network, WGN America, and a 31 percent stake in TV Food Network. The combined company will own or service 216 full power TV stations in 118 markets (not accounting for any divestitures) and a significant digital media operation.

In the first year following completion of the merger and divestitures, Nexstar anticipates realizing about $160 million in operating synergies. Bank of America, Merrill Lynch, Credit Suisse and Deutsche Bank have committed financing for the transaction, it added.

According to Sook, Nexstar has developed a comprehensive plan to comply with regulatory requirements and believes it has “a clear path to closing.”

This summer the proposed merger of Sinclair and Tribune hit a serious snag when FCC Chairman Ajit Pai expressed concern about the legality of the transaction. The commission voted to allow an administrative judge to resolve the issue, delaying resolution of the matter indefinitely and prompting Tribune to walk away.

Separately, the FCC’s Office of Inspector General has completed a follow-up investigation of the proposed Sinclair-Tribune merger and again has found no evidence that the FCC Chairman acted improperly.

The investigation stemmed from a request by U.S. Rep. Frank Pallone Jr. (D-N.J.), ranking member of the House Committee on Energy and Commerce, to investigate Pai’s conduct regarding his interactions with the White House as related to the Sinclair-Tribune merger.

“We are pleased that the Office of Inspector General has confirmed for a second time that there were no improper actions taken during the Sinclair-Tribune review process and that the investigation has concluded,” said Brian Hart, director of the FCC’s Office of Media Relations.