Meredith Proposes Amendment To Terms Of Merger Agreement With Media General

(RTTNews) - Meredith Corp. (MDP) said it has proposed an amendment to the terms of its merger agreement with Media General Inc. (MEG).

The amended agreement offers Media General shareholders more than $20 per share in near-term value including: $3.90 per share in cash at closing for total cash proceeds of approximately $510 million; One share of Meredith Media General for each share of Media General, representing an implied pro-forma equity value of $14.94 per share; A contingent value right or CVR representing after-tax net cash proceeds from the sale of Media General's spectrum in the FCC's upcoming spectrum auction. Media General estimates that its spectrum assets could potentially be worth up to $4.29 per share in after-tax value.

In addition, the new Meredith Media General would pay an annual dividend starting at $0.68 per share.

Meredith said that its proposal to Media General - which would amend the terms of the agreement announced on September 8th, 2015 - would create a "Merger of Equals." Media General shareholders would own 50.2 percent and Meredith shareholders, who would receive 2.8244 shares of Meredith Media General for each share of Meredith, would own 49.8 percent, of the fully-diluted shares of Meredith Media General. Meredith shareholders would receive $14.95 per Meredith share in cash at closing for total cash proceeds of approximately $685 million.

Meredith and Media General will continue along the current regulatory approval timeline, with a targeted closing date by June 30, 2016, pending successful completion of overlap station divestitures. That process is well underway, as are many of the regulatory filings and joint integration initiatives.

Meredith believes Nexstar and Media General will not be able to enter into a merger agreement and file their applications before the commencement of the Federal Communications Commission's (FCC) 'quiet period' related to the digital spectrum auction, which starts on January 12, 2016.

Meredith believes that a Nexstar-Media General combination could not be completed for at least a year, if not longer, significantly delaying any financial benefit to Media General shareholders, and exposing the transaction to potential market and industry risks.

Earlier today, Nexstar Broadcasting Group said that it has completed the negotiation of terms for a transaction with Media General under which Nexstar would acquire Media General for $10.55 per share in cash and 0.1249 of a share of Nexstar Class A common stock for each Media General share.

In addition, the terms contemplate additional consideration to Media General shareholders in the form of a contingent value right or "CVR" for each Media General share entitling Media General shareholders to net cash proceeds as received from the sale of Media General's spectrum in the FCC's upcoming spectrum auction.

The negotiated transaction reflects a value of $17.66 per Media General share based on Nexstar's closing share price on January 6, 2016, plus the value of the CVR.

Media General also confirmed that it has completed the negotiation of terms for a transaction under which Nexstar Broadcasting Group, Inc. would acquire Media General.