Meredith Corp. is confident in the short- and long-term monetary future of Meredith Media General.
"Meredith understands Media General Board's fiduciary responsibility to respond to the Nexstar proposal consistent with our binding merger agreement announced on September 8, 2015,” said the company in a statement. “However, Meredith still remains confident that the combination of Meredith and Media General will generate superior shareholder value – over both the near- and long-term – as compared to a potential Nexstar transaction."
Meredith was responding to Media General’s announcement Monday morning that its board unanimously decided the company should negotiate with Nexstar Broadcasting Group.
Following the early September announcement of a $2.4 billion merger between Meredith and Media General, Nexstar made an unsolicited $4.1 billion bid for Media General, with major shareholders offering support of the latter deal soon thereafter. Media General, which eventually retained additional financial and legal advisors to assist its board of directors in examining it, revealed on Oct. 14 that it had reached an agreement with Meredith permitting the mutual exchange of specific non-public information with Nexstar.
Reiterating that its binding merger agreement with Media General remains intact and the boards of Meredith and Media General still recommend that deal, Meredith said the companies are progressing in their effort to attain regulatory approvals and complete the transaction.
Meredith, which said its “joint integration work has already identified additional synergies,” added that under the deal it will have the chance to examine and offer an alternative proposal to a potential third party agreement Media General might make.
"Meredith's Board of Directors still unanimously agrees that the merger agreement reached with Media General as currently structured is in the best interests of shareholders," said Stephen M. Lacy, Meredith chairman and CEO. "Enhancing Meredith shareholder value will remain our top priority as we move forward in this merger process."
Of the convincing features of Meredith Media General, Meredith cited the combined company’s reach of 30% of TV households and over 60 percent of U.S. millennial women, $500 million projected first-year revenue and more than 200 million monthly unique digital platform visitors.
Despite announcing that it would negotiate with Nexstar, Media General still rejected the original proposal, saying it undervalues the company. Nexstar was surprised by that notion but nonetheless excited to further negotiate.
“We are willing to engage with them to hear their perspectives,” said Perry Sook, Nexstar chairman, president and CEO, Monday morning. “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 two weeks ago, Sook said that, based on historical trends and recent results, he expected Nexstar to succeed in acquiring Media General.