Meredith Said Close to Allowing Nexstar's Media General Deal

  • Parties said to be near agreement on termination package
  • Meredith may make announcement Wednesday with earnings

Meredith Corp. is close to walking away from its attempt to merge with Media General Inc., allowing Nexstar Broadcasting Group Inc. to acquire the TV station owner after months of negotiation, according to people familiar with the matter.

Meredith, the owner of broadcast stations and magazines like Better Homes and Gardens and Fit Pregnancy, is close to agreeing to a termination package that would include a $60 million breakup fee, said the people, who asked not to be named because the negotiations are private.

The pact may include a first look at certain TV stations and digital businesses, in case Meredith wants to buy them as divestitures from a combined Nexstar-Media General, said two of the people. The termination agreement could be announced as soon as Wednesday, when Meredith releases its quarterly results.

Media General initially agreed to acquire Meredith for $2.4 billion in September. Nexstar later offered to buy Media General, eventually reaching an agreement for about $2.3 billion. But that deal can’t move forward until Meredith releases Media General from its commitment. Meredith had previously refused Media General’s attempts to terminate their merger agreement, threatening to force a shareholder vote.

Meredith rose 2.1 percent to $37.97 at 12:45 p.m. New York time. Media General, based in Richmond, Virginia, rose 2.9 percent to $16.03. Nexstar, based in Irving, Texas, rose 2.7 percent to $48.66.

Media General shares moved higher as an acquisition agreement was said to be near.
Media General shares moved higher as an acquisition agreement was said to be near.

Press representatives for Meredith and Media General declined to comment, while Nexstar didn’t respond to requests for comment.

Nexstar agreed to give Media General shareholders $10.55 in cash and 0.1249 of a Nexstar share earlier this month, for a total value of $17.66 a share. The broadcaster also agreed to pay a contingent value right, or CVR -- a type of option issued to the buyer of a company -- to account for the proceeds Media General receives in an upcoming spectrum auction run by the U.S. Federal Communications Commission.

In addition to its existing agreement with Media General, Meredith also offered a merger of equals, including a CVR, $3.90 in cash, and one share in the combined company. Meredith said the deal valued a combined company at about $18.84 per Media General share, not including the CVR.

Meredith has been in discussions with Media General to improve the merger terms on a deal for the past three weeks, the people said. Media General informed Meredith it wasn’t interested in a deal even with amended terms, pushing the Des Moines, Iowa-based company to refocus on terminating the deal, two of the people said.

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