Nexstar Said to Near Finalizing Media General Proposal

  • Offer would trigger at least 4-day window for Meredith counter
  • Nexstar tapping three banks for $4.5 billion in debt financing

Nexstar Broadcasting Group Inc. will finalize the details of a proposal to acquire Media General Inc. as soon as today, people with knowledge of the matter said, triggering a window for rival Meredith Corp. to say it intends to make a counteroffer.

Nexstar has tapped Bank of America Corp., Deutsche Bank AG and Credit Suisse Group AG to finance the deal, said the people, who asked not to be identified because the information is private. Nexstar plans to raise about $4.5 billion to acquire Media General and refinance existing debt, the people said.

The two companies are close to reaching an agreement in which Nexstar would pay about $2.2 billion, or about $17.50 a share, for Media General, people familiar with the matter told Bloomberg last week. Once Nexstar and Media General come to an agreement, Meredith will have at least four business days to say it plans to match that offer or make an increased bid. The talks may still fall apart or take more time, the people said.

The Nexstar-Media General transaction would be about 60 percent cash and 40 percent stock, the people said. Media General, based in Richmond, Virginia, has about $2.3 billion in total debt, according to data compiled by Bloomberg.

Representatives for Media General, Nexstar and Meredith declined to comment, as did spokesmen for Deutsche Bank, Credit Suisse and Bank of America.

Media General shares closed up 5.7 percent Thursday, while Meredith fell 0.2 percent. Nexstar rose 1.3 percent.

Meredith’s Options

Media General rejected an initial offer from Nexstar this month of $16.31 a share. Media General agreed to acquire Meredith Corp. for $2.4 billion in September.

While Meredith hasn’t made up its mind about what it wants to do, the company remains interested in a transaction, two people said. In any case, a Nexstar-Media General combination couldn’t be completed until the Meredith deal is terminated, either voluntarily or by a shareholder vote, which is six weeks away.

If Meredith chooses to force a vote or renegotiate with Media General, Nexstar may have to wait until the second half of 2016 to sign a deal. Nexstar and Media General can’t enter a merger agreement while the Federal Communications Commission’s quiet period is ongoing related to the government’s broadcast spectrum auction, unless one or both parties opt not to participate. The quiet period begins Jan. 12.

Media General owns 71 TV stations in 48 markets. Nexstar owns, operates or provides services to 107 TV stations.

Nexstar has already said it plans to divest seven TV stations to sidestep laws that prevent monopoly ownership of broadcast stations in the same market. The stations generate about $30 million in annual earnings before interest, taxes, depreciation and amortization, one of the people familiar with the matter said.

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