Media General and LIN Media, in an effort to expedite their merger, have announced divestments in five markets. Hearst Corp. will acquire Media General's WVTM Birmingham and LIN's WJCL Savannah (Ga.) for an undisclosed price, and Meredith will acquire LIN's WALA Mobile (Ala.) for $85 million.
Media General, meanwhile, will acquire Sinclair's KXRM and KXTU in Colorado Springs-Pueblo, and Sinclair's WTTA in Tampa-St. Petersburg. Sinclair will acquire LIN's WJAR Providence along with WLUK-WCWF in Green Bay-Appleton. Sinclair will also acquire certain assets of WTGS Savannah, and the rights to acquire the principal assets of the station from WTGS Television, LLC.
"We're pleased to announce this divestiture plan, which we believe should clear the way for our business combination with LIN Media to move forward in the regulatory approval process," said George L. Mahoney, president and CEO of Media General. "Additionally, the purchase of the MyNetworkTV station in Tampa provides us with the opportunity to increase share in Media General's second largest market. Also, the addition of the Fox and CW affiliates in Colorado Springs marks the first time we will have a television station in Colorado. The stations being divested are strong performers."
Vincent L. Sadusky, president and CEO of LIN Media, will become president and CEO of the merged company. He called the divestiture plan "an important milestone that positions us well with regulatory authorities."
"We are pleased with the consideration we will receive for these terrific stations and plan to use the net proceeds to reduce debt," he continued. "The addition of stations in Tampa and Colorado Springs will further diversify and strengthen the combined company's portfolio as well as provide opportunities to expand our digital business."
Media General and LIN also amended their merger agreement, likely a result of LIN's WISH Indianapolis losing its CBS affiliation August 11. The two had agreed on a deal at $27.82 per LIN share, but now have settled on $25.97 per share.
"Today's release is not a surprise to us given that many changes have occurred since the original deal was announced," wrote Marci Ryvicker, senior analyst at Wells Fargo Securities, citing the affiliation hiccup in Indianapolis.
Shareholder meetings scheduled for August 20 are rescheduled for October 6.
"Both companies are strongly committed to successfully closing this transaction and the amended merger agreement reaffirms that commitment," said Sadusky.
Regarding the stations trading hands, Sinclair's moves free up 0.7% of national ownership cap, it said. “Although there is a need for regulatory reform to increase the ownership cap," said David Smith, president and CEO of Sinclair, "swaps like this are advantageous to us in that we are trading a single MyNet affiliate in a large market, allowing us to acquire quality television stations in smaller DMAs.”