Starboard Says Media General's Pending Acquisition Of Meredith Value Destructive

(RTTNews) - Starboard Value LP delivered Letter to Media General Inc.'s (MEG) Chairman and CEO and Board of Directors, expressing belief that the pending acquisition of Meredith corp. (MDP) is value destructive and does not make strategic or financial sense for shareholders.

Starboard, which beneficially owns about 4.5% of the outstanding shares of Media General, expressed serious concern over Media General's apparent refusal to negotiate a superior transaction with Nexstar Broadcasting Group (NXST) prior to finalizing the questionable Meredith transaction.

Starboard said, "With great interest, we reviewed yesterday's proposal from Nexstar to acquire Media General for $14.50 per share, consisting of $10.50 per share in cash and a fixed exchange ratio of 0.0898 Nexstar shares per Media General share. We were surprised to learn that Nexstar had previously made a private proposal to acquire Media General but that management and the Board had refused to engage in discussions with Nexstar."

The Wall Street Journal reported yesterday that Nexstar's private proposal, which was submitted on August 10, 2015, was valued at $17 per share, which would have represented a 23% premium to the then current share price of Media General.

"It is concerning to us, and we imagine to just about all of your shareholders as well, that management and the Board of Media General would refuse the opportunity to negotiate a potential value-maximizing transaction with Nexstar and instead proceed to expeditiously execute such an unconventional, value-destructive acquisition," Starboard said.

Starboard urged the Board of the Media General to immediately make every effort to negotiate the best possible deal for its shareholders in accordance with its fiduciary duties. It cautioned the board not to take any action to frustrate shareholders' ability to vote on any proposed transaction.

On Monday, Diversified media company Nexstar Broadcasting Group proposed to acquire television stations owner Media General for $14.50 per share in a cash and stock deal valued at $4.1 billion, including assumption of Media General's debt.

Media General agreed on September 8 to acquire all of the outstanding common stock of diversified media company Meredith in a cash and stock deal valued at about $2.4 billion or about $3.1 billion, including Meredith's net debt balance of $772 million.