Nexstar's takeover bid of $16.31 per share for Media General "does not properly compensate our shareholders," the board says, pointing out that it was just last August that Nexstar was willing to pay $17.
Media General Says Nexstar Bid Doesn’t Cut It
Media General said Wednesday afternoon that it “remains open” to merging with Nexstar Broadcasting, but that Nexstar will have to do better than the $16.31 per share it now has on the table.
Nexstar’s current bid is less than the $17 that it offered privately last August and that the Media General board unanimously rejected, Media General pointed out.
The current bid is 8.2 times Media General estimated blended 2015-2016 post-synergy EBITDA and “implies greater than 50% free cash flow accretion to Nexstar’s shareholders,” Media General said.
“Additionally, as we have discussed during our due diligence sessions with Nexstar, our business is gearing up towards a strong 2016 political year and promising retransmission repricings, which are a big source of growth in our projected cash flows,” Media General said.
“Despite these significant financial and strategic benefits that Nexstar and its shareholders would gain … Nexstar refuses to properly price the combination and materially improve its view on value.
“Our board believes that a change in control transaction at the proposed valuation levels does not properly compensate our shareholders for the financial and strategic value Media General would bring to a combination with Nexstar.”
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Comments (3)
Amneris Vargas says:
December 10, 2015 at 12:16 pm
Yesterday, the street liked MDP. Today, NXST erasing Wednesday’s loss. Will “Net contingent value right” of spectrum figure into any deal? For any Board to consider the upside of “net contingent spectrum value,” each company would need to exchange auction proceed projections (and actually buy into the others’ educated guess work). Here’s a rub: The quiet period starts 6pm Jan. 12th. That’s 18 business days from now, considering holidays.
Brad Dann says:
December 10, 2015 at 3:49 pm
Translation from the MG Board (Bryan family -see language about “Change in Control transaction”): our tax bill would be to high, that’s why we like the Meredith deal better.
Amneris Vargas says:
December 10, 2015 at 4:10 pm
FederalGuy is right.