Media General rejects Nexstar bid, but willing to talk
RICHMOND, Va. (AP) — The television company Media General rejected a $1.9 billion buyout offer from Nexstar Broadcasting on Monday, but said that it's still willing to talk.
The Nexstar bid comes in the wake of a $2.4 billion bid from Media General Inc. for Meredith Corp., which owns television stations and publishes about 20 magazines. Media General said in September that a deal with Meredith would create a company with almost 90 television stations in 54 markets and magazines including Better Homes and Gardens and Martha Stewart Living.
Some see the bid from Nexstar, which owns, operates, programs or provides services to more than 100 television stations in 58 markets, as an attempt to drive a wedge between Meredith and Media General. Its offer for Media General, based in Richmond, Virginia, was valued at $4.1 billion, including debt. Nexstar has said that a tie-up with Media General would reach 39 percent of U.S. TV households and create the second-largest owner of major network affiliates.
Activist investor Starboard Value LP has been urging Media General to negotiate with Nexstar and drop its pursuit of Meredith. Starboard has said that buying Meredith isn't the right move for Media General because it would put the company back into the print business. Media General sold its newspaper businesses in 2012 so it could better focus on its money-making television stations.
However, Media General said Monday that it believes Nexstar's current offer significantly undervalues the company and its prospects. Still, it plans to engage in private negotiations with Nexstar.
Nexstar Chairman and CEO Perry Sook said in a written statement that the company is "eager to move forward" with talks with Media General.
Media General's board continues to support the proposed Meredith deal. For its part, Meredith said it remains confident that a deal with Media General would generate superior benefits for shareholders compared with any Nexstar deal. Meredith also said that if Medial General reaches a potential deal with a third party such as Nexstar that they have the chance to present an alternative offer.
Shares of Media General fell 8 cents to $15.38, Meredith's stock rose 80 cents to $45.87. Shares of Nexstar Broadcasting Group Inc. added 72 cents to $58.63.