Which Bid Is Best For Media General?

While Media General is dutifully recommending to its shareholders that they vote to approve the so-called “merger of equals” between it and Meredith Corp., it appears that the competing offer by Nexstar is what the Media General board prefers.

Shortly after Nexstar announced early Thursday morning that it had “completed the negotiation” to acquire Media General for $17.66 a share in cash and stock, Meredith Corp. countered with a “merger of equals” in which Media General shareholders would receive $18.84 in cash and stock in the combined company. (This represented a better deal than Media General shareholders would have received under the original merger agreement between Media General and Meredith, which was struck last fall.)

The same day, Media General and Meredith Corp. filed a preliminary joint proxy statement with the Securities and Exchange Commission on their plan to merge the companies.

The document’s opening page tells shareholders: “The board of directors of Media General has approved the merger agreement and the transaction contemplated thereby and recommends that the Media General shareholders vote ‘FOR’ the approval of each of the proposals to be voted on by the Media General shareholders at the Media General special meeting, as described in the accompanying joint proxy statement/prospectus.”

However, the 430-page document also contains a statement that suggests that the Media General board believes Nexstar is the better course.

The filing says that on Jan. 5, “at the direction of the Media General board of directors, [CEO Vincent] Sadusky communicated in writing to [Meredith CEO Stephen] Lacy that, in Media General’s view, Meredith’s proposed merger of equals transaction of Dec. 17, 2015, was not competitive with Media General’s proposed transaction construct with Nexstar.”