Media General agrees to negotiate with Nexstar Broadcasting
Richmond-based Media General Inc. has rejected an unsolicited takeover offer from Nexstar Broadcasting Group Inc. but says it is willing to negotiate with the Texas company.
Nexstar made an offer for Media General worth $4.1 billion including debt shortly after the Richmond company announced a deal to acquire Iowa-based Meredith Corp. for $3.1 billion.
Deriding the Meredith deal as “ill-conceived,” Nexstar, which is based in Irving, Texas, said its offer was superior and complained that an earlier bid for Media General had been given little consideration.
On Monday, Media General said that its board had decided to negotiate with Nexstar about a possible deal after determining the Meredith agreement allowed it to explore an acquisition proposal from a third party.
Media General, however, rejected Nexstar’s offer, “as currently constructed,” saying it undervalued the company and its prospects.
“It is evident since our initial announcement that Media General and Nexstar shareholders recognize the compelling strategic and financial value that a Media General-Nexstar combination presents for both companies and our respective shareholders,” said Perry Sook, the chairman, resident and CEO of Nexstar, said in a statement.
“We are surprised that Media General’s Board considers the value of our proposal to be inadequate today, however, we are willing to engage with them to hear their perspectives,” he said.. “We believe our proposal will deliver superior, immediate and long-term value to Media General shareholders compared with any alternatives available to the company.”
The acquisition would create a company with 162 television stations in 99 markets, making it the second-largest owner of network affiliates in the nation.
Nexstar had proposed paying $10.50 in cash plus 0.0898 Nextar shares for each Media General share. Based on its closing price on Nov. 13, Nexstar said the offer is worth $15.70 per Media General share.