Media General to merge with New Young Broadcasting
Richmond-based Media General Inc. and Nashville-based New Young Broadcasting Holding Co. plan to merge in an all-stock deal.
The combined company will keep the Media General name and will be based in Richmond.
After the announcement, Media General Class A common stock rose nearly 34 percent to close at $9.76, up $2.46 from its Wednesday close.
The new company will have 30 television stations operating in 27 markets, reaching 16.5 million of U.S. TV households. On a pro forma basis, 2012 revenues were $605 million.
Media General owns 18 network-affiliated stations, while Young owns or operates 12 stations, including WRIC, an ABC affiliate in Richmond.
Under the merger deal, Media General will create a new class of common stock, which will be entitled to elect all of the company’s directors.
Each outstanding share of its existing Class A and Class B common stock will be reclassified as one share of the newly created class.
Media General Class B stock, largely held by the company founding Bryan family, previously had the right to elect 70 percent of the company’s directors.
Media General will issue about 60.2 million shares of the new common stock to Young shareholders. The estimated total shares outstanding after closing will be 89.1 million. Media General’s pro forma ownership split will be approximately 32.5 percent Media General shareholders and 67.5 percent Young shareholders.
J. Stewart Bryan III, the chairman of Media General, described the deal as “a transformational event,” that would improve free cash flow and allow the company to refinance its debt at much lower cost.
“Young’s management and its owners share Media General’s commitment to quality local journalism and to operating top-rated TV stations, making this merger a unique and compelling combination with significant growth potential,” he said in a statement. “ I have agreed to vote all of my shares to unwind Media General’s dual-class stock structure and to approve the transaction. I look forward to benefiting as a continuing long-term shareholder in the new Media General.”
George L. Mahoney, president and chief executive officer of Media General, will remain in that role in the new company.
Media General sold its newspaper holdings last year. Most of them, including its flagship newspaper Richmond Times-Dispatch, were bought by Omaha, Neb.-based Berkshire Hathaway.