Media General said its board has unanimously decided the company should negotiate with Nexstar Broadcasting Group, which offered a $4.1 billion unsolicided bid for the TV station owner back in September.
But the Media General board said that Nexstar’s current unsolicited offer was rejected because it undervalues the company.
Media General had favored acquiring Meredith Corp. — the companies announced a $2.4 billion Merger in early September — but following Nexstar's proposal, major shareholders came out against the deal, partly because of Meredith’s old-media, publishing assets.
The board said its agreement with Meredith allows Media General to explore a potential transaction and negotiation with a third party making an acquisition proposal. Media General announced in mid-October it would be exchanging certain non-public information with Nexstar.
Nexstar’s bid was deemed insufficient because it “discounts Media General’s standalone growth prospects, ignores the significant asset value embedded in Media General’s excess spectrum that can be monetized via the upcoming Broadcast Auctions, and does not reflect an equitable share of the synergies outlined in the Proposal made by Nexstar,” the company said in a statement.
Media General noted that there are no guarantees that these negotiations will result in a transaction with Nexstar.
Perry Sook, Nexstar chairman, president and CEO, said the company excited to further negotiate with Media General.
“It is evident since our initial announcement that Media General and Nexstar shareholders recognize the compelling strategic and financial value that a Media General-Nexstar combination presents for both companies and our respective shareholders,” Sook said. “We are surprised that Media General’s Board considers the value of our proposal to be inadequate today, however, we are willing to engage with them to hear their perspectives. We believe our proposal will deliver superior, immediate and long-term value to Media General shareholders compared with any alternatives available to the company.”
During Nexstar’s earnings call Nov. 3, Sook was confident in Nexstar's chances with Media General. “Past history and recent results, both ours and those of other involved parties, indicate that we should prevail in our efforts to acquire Media General,” he said.