Nine U.S. TV Stations Swapped for $537 Million

RICHMOND, VA.—Media General unleashed a flurry of deals Wednesday, announcing nine station swaps and adjusted merger terms with LIN Media, which lost its CBS affiliation in Indianapolis to Tribune earlier this month.

Media General will spend about $177 and take in $360 million in the series of transactions, bring aggregate transaction values to $537 million. The swaps involve Sinclair, Meredith, Hearst, Media General and LIN.

Sinclair is taking WJAR-TV, the NBC affiliate in Providence, R.I. off Media General’s hands, and buying Green Bay, Wis. Fox and CW affiliates—WLUK-TV and WCWF-TV, respectively—from LIN Media.

“In addition and as part of the transactions, Sinclair will pay a net cash price of $31 million for an additional $3.4 million of cash flow being swapped,” Sinclair said.

Sinclair is also taking over LIN’s shared services agreement for WTGS-TV, the Fox affiliate in Savannah, Ga.; and the rights to acquire the principal assets of the station, which is owned by Vaughan Media of Port Charlotte, Fla.

Hearst will acquire Media General’s NBC affiliate, WVTM-TV, in the Birmingham, Ala., market and LIN’s ABC affiliate in Savannah, WJCL-TV.

Meredith will acquire WALA-TV, LIN’s Fox affiliate in the Mobile, Ala. and Pensacola, Fla., markets, for $86 million.

Media General will take Sinclair’s Fox affiliate KXRM-TV in Colorado Springs, Colo.; KXTU-LD, The CW in Pueblo, Colo.; and WTTA-TV, the MyNetwork affiliate in the Tampa-St. Petersburg, Fla., market.

Media General’s aggregate purchase price of $177 million for the stations includes its previously announced acquisition of WHTM-TV, the ABC affiliate in Harrisburg, Pa., from Sinclair. Aggregate proceeds from its divested stations will be around $360 million, including the $117 million from Sinclair and Meredith.

The remaining individual deal terms were not available immediately.

Upon the closing of the transactions, Media General and LIN combined will own and operate or service 71 stations across 48 markets, reaching 27.6 million people or 24 percent of U.S. television households.

Meredith will own 15 TV stations in 11 markets reaching 10 percent of U.S. TV households.

Hearst will have 30 stations in 27 markets reaching around 19 percent of U.S. TV households, with its NBC affiliates reaching 8 percent across 11 markets.

Sinclair is left standing with 163 TV stations in around 78 markets reaching 38.2 percent of TV households.

Separately, Media General announced an adjustment of terms of its merger with LIN, following LIN’s loss of the CBS affiliation for its Indianapolis station, WISH-TV. Media General initially agreed to purchase LIN on March 21 for $27.82 per share cash or 1.5762 per share in Media General stock. The adjusted price is now $25.97 cash or 1.4714 in stock, but keeping the original maximum cash payout to LIN shareholders at $763 million.

It reduces Media General pro forma multiple from 8.6x to 8x, according to Wells Fargo analysts, and will leave Media General shareholders with 67 percent and LIN’s with 33 percent of the merged entity.

Media General said its net proceeds, after taxes and expenses, are expected to be in the range of $140 million to $160 million and will be used to reduce debt after the closing of the LIN merger in early 2015.

The companies continue to expect to realize combination run-rate synergies of $70 million in three years with approximately one-half of that amount
realized by the end of the first year following the completion of the transaction.

The divestitures and acquisitions are contingent upon regulatory and other customary approvals.

Also see…
Aug. 11, 2014:
CBS Moves Indianapolis Affiliation to Tribune's WTTV-TV

July 15, 2013:DoJ Signals OK to Sinclair-Allbritton Deal on Divestiture of WHTM-TV