Nexstar Broadcasting and Media General said Thursday they had reached a $2.25 billion deal to combine to create the second-largest U.S. broadcaster, in a deal that faces opposition from rival broadcaster Meredith.
U.S. broadcasters have been looking to consolidate in recent years to improve their ability to attract local ad dollars and lucrative fees collected from cable companies, which pay local TV stations to carry their signals.
The announcement would mark the end of a more than four-month effort by the Irving, Texas-based Nexstar (NXST) led by chief executive Perry Sook to buy Richmond, Virginia-based Media General (MEG) and also ends a bid by Media General to buy New York-based Meredith for $2.34 billion.
Meredith, however, is not letting Media General get out of its previously announced merger so easily. Meredith said in a statement Thursday that its deal is still in place with Media General, whose shareholders will have a chance to vote on that deal starting in February.
Media General said Thursday that it has made several proposals to Meredith to terminate their deal but Meredith has been unwilling to accept these offers. Media General said it plans to hold a shareholder vote on the Meredith transaction as soon as possible. If shareholders vote against the Meredith acquisition, Media General can get out of its agreement.
Nexstar said it would pay $10.55 per share in cash and 0.1249 of a share of Nexstar stock for each Media General share, an equivalent of $17.66 per share. Nexstar said it agrees to sell TV stations necessary to receive regulatory approval and two Media General directors would join Nexstar’s board.
In September, Nexstar made an unsolicited bid to buy Media General for $14.50 per share or about $4.1 billion, just weeks after Media General had announced a deal to acquire smaller rival Meredith.
Activist investor Starboard Value disclosed a 4.5% stake in Media General in September and urged the company to sell itself to Nexstar and scrap its plan to buy Meredith.
Starboard has previously said it was prepared to nominate an alternative slate of directors to Media General‘s board. The month-long window to nominate a slate of directors to MediaGeneral‘s boards began on Dec. 26.