Nexstar Broadcasting Group, Inc. (Nasdaq:NXST) today reiterated its
commitment to acquire Media General, Inc. (NYSE: MEG) and to take all
necessary actions to consummate a transaction that is clearly in the
best interests of both Media General and Nexstar shareholders.
Perry Sook, Chairman, President and CEO of Nexstar, said, “We remain
fully committed to acquiring Media General and with the support of its
Board of Directors and shareholders expect to consummate a transaction
expeditiously. Despite Meredith Corporation’s attempt to recast its
proposed combination with Media General as a merger of equals, it is
clear that Media General favors a transaction with Nexstar and shares
our commitment to seeing it to fruition. As described by Media General
in its most recent S-4 filing, Meredith’s proposed no-premium merger of
equals transaction is ‘not competitive with Media General’s proposed
transaction construct with Nexstar.’
“While Meredith’s continuing refusal to terminate its agreement is
misguided, it will not prevent Nexstar from continuing to pursue its
fully negotiated transaction with Media General. In fact, based on
inquiry with the Federal Communications Commission (“FCC”), we believe
the commission will continue to process applications during the spectrum
auction, with the approval in ordinary course allowing for closing of
approved transactions upon the FCC’s release of the Auction Results
Public Notice or shortly thereafter.
“Should the Meredith management and Board persist in taking its
acquisition by Media General to a vote of Media General shareholders --
which is expected to occur within the next 60 days -- it will certainly
be voted down. The fact that Meredith sought to change its transaction
terms is a clear admission that our proposal is superior. We intend to
take any steps that may be necessary to allow us to consummate our
agreed transaction with Media General. We have already reached agreement
with Media General on the terms of a transaction, filed a form of merger
agreement with the SEC, and have finalized terms with banks ready to
provide approximately $4.7 billion in financing in support of the
transaction. We expect to quickly sign a definitive agreement with Media
General as soon as Media General shareholders vote down the transaction
with Meredith (or earlier if a settlement is reached between Media
General and Meredith to terminate their merger agreement).
“Our transaction provides a significant premium to Media General’s
shareholders, including a cash component of $10.55, and allows Nexstar
and Media General shareholders to participate in the near- and long-term
upside of a pure-play broadcasting company with expanded audience reach,
a more diversified portfolio and a significantly stronger financial
profile, led by a proven broadcast and digital media management team.
Nexstar management’s commitment to its shareholders and value creation
is reflected both by our personal ownership and record of appreciation
over the last five years. During this period Nexstar delivered equity
returns of more than 785% compared with Meredith management’s
approximate 30% return which lagged key indexes including the S&P 500
which rose 50% over this period. More recently, Nexstar delivered an 8%
return over the last year compared to Meredith which lost more than 19%
of its value, again underperforming its peer group and major indexes.
Reflecting this data we are confident that Media General shareholders
will choose Nexstar’s offer as superior to Meredith’s proposal.
“Nexstar’s acquisition of Media General will be an extraordinarily
powerful combination that creates the nation's second largest operator
of television properties with a strong focus on localism. Our increased
scale will allow advertisers and brands to benefit from a more
comprehensive, integrated and competitive offering across all
markets. Financially, this transaction will enable us to further
broaden our revenue base, diversify our cash flow and generate over $500
million of annual free cash flow, equating to approximately $10.50 per
share of average free cash flow per year over the 2015/2016 period,
which will enhance long-term shareholder returns and would be allocated
for leverage reduction, additional strategic investments and the return
of capital to shareholders. In contrast, the Meredith proposal would
again expose Media General shareholders to the challenged publishing
business with approximately 54% of the acquired net EBITDA in the
Meredith transaction coming from publishing. We encourage Media General
shareholders to continue to voice their opposition to the transaction
with Meredith in advance of the special meeting.”
As previously announced, Nexstar and Media General have completed the
negotiation of terms under which Nexstar would acquire Media General for
$10.55 per share in cash and 0.1249 of a share of Nexstar Class A common
stock for each Media General share. In addition, the terms contemplate
additional consideration to Media General shareholders in the form of a
contingent value right ("CVR") for each Media General share entitling
Media General shareholders to net cash proceeds as received from the
sale of Media General's spectrum in the FCC's upcoming spectrum auction.
Also as previously announced, the negotiated transaction would not be
subject to any financing condition; Nexstar intends to divest the TV
stations necessary to obtain FCC regulatory approval of the proposed
transaction; and, two Media General directors would join the Nexstar
Board of Directors at closing. Because the Meredith-Media General merger
agreement has not been terminated, there can be no assurance that any
transaction with Media General will result (or the terms or timing
thereof).
BofA Merrill Lynch is acting as financial advisor and Kirkland & Ellis
LLP is acting as legal counsel to Nexstar in connection with the
proposed transaction.
About Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting Group is a leading diversified media company that
leverages localism to bring new services and value to consumers and
advertisers through its traditional media, digital and mobile media
platforms. Nexstar owns, operates, programs or provides sales and other
services to 106 television stations and related digital multicast
signals reaching 57 markets or approximately 17.3% of all U.S.
television households. Nexstar’s portfolio includes affiliates of NBC,
CBS, ABC, FOX, MyNetworkTV, The CW, Telemundo, Bounce TV, Me-TV, LATV,
Estrella, This TV, Weather Nation Utah, Movies! and News/Weather.
Nexstar’s community portal websites offer additional hyper-local content
and verticals for consumers and advertisers, allowing audiences to
choose where, when and how they access content while creating new
revenue opportunities.
Pro-forma for the completion of all announced transactions Nexstar will
own, operate, program or provide sales and other services to 114
television stations and related digital multicast signals reaching 59
markets or approximately 18% of all U.S. television households.
Additional Information
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. This communication relates to a
proposal which Nexstar Broadcasting Group, Inc. (“Nexstar”) has made for
a business combination transaction with Media General, Inc. (“Media
General”). In furtherance of this proposal and subject to future
developments, Nexstar (and, if a negotiated transaction is agreed, Media
General) may file one or more registration statements, prospectuses,
proxy statements or other documents with the U.S. Securities and
Exchange Commission (“SEC”). This communication is not a substitute for
any registration statement, prospectus, proxy statement or other
document Nexstar and/or Media General may file with the SEC in
connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS
OF NEXSTAR AND MEDIA GENERAL ARE URGED TO READ ANY REGISTRATION
STATEMENT, PROSPECTUS, PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH
THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Any definitive proxy statement (if and when available) will be mailed to
stockholders of Media General. Investors and security holders will be
able to obtain free copies of these documents (if and when available)
and other documents filed with the SEC by Nexstar or Media General
through the web site maintained by the SEC at http://www.sec.gov.
Certain Information Regarding Participants
Nexstar and certain of its directors and executive officers may be
deemed to be participants in any solicitation with respect to the
proposed transaction under the rules of the SEC. Security holders may
obtain information regarding the names and interests of Nexstar’s
directors and executive officers in Nexstar’s Annual Report on Form 10-K
for the year ended December 31, 2014, which was filed with the SEC on
March 2, 2015, and Nexstar’s proxy statement for the 2015 Annual Meeting
of Stockholders, which was filed with the SEC on April 24, 2015. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the interests of participants in
any proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will also be included in
any proxy statement and other relevant materials to be filed with the
SEC if and when they become available.
Forward-Looking Statements
This communication includes forward-looking statements. We have based
these forward-looking statements on our current expectations and
projections about future events. Forward-looking statements include
information preceded by, followed by, or that includes the words
"guidance," "believes," "expects," "anticipates," "could," or similar
expressions. For these statements, Nexstar claims the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. The forward-looking statements
contained in this communication, concerning, among other things, the
ultimate outcome and benefits of any possible transaction between
Nexstar and Media General and timing thereof, and future financial
performance, including changes in net revenue, cash flow and operating
expenses, involve risks and uncertainties, and are subject to change
based on various important factors, including the possibilities that
Nexstar will not pursue a transaction with Media General and that Media
General will reject a transaction with Nexstar (or otherwise that no
transaction will be consummated), the impact of changes in national and
regional economies, our ability to service and refinance our outstanding
debt, successful integration of Media General (including achievement of
synergies and cost reductions), pricing fluctuations in local and
national advertising, future regulatory actions and conditions in the
television stations' operating areas, competition from others in the
broadcast television markets served by Nexstar, volatility in
programming costs, the effects of governmental regulation of
broadcasting, industry consolidation, technological developments and
major world news events. Unless required by law, we undertake no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events
discussed in this communication might not occur. You should not place
undue reliance on these forward-looking statements, which speak only as
of the date of this release. For more details on factors that could
affect these expectations, please see our filings with the Securities
and Exchange Commission.
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