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Media General to buy Meredith for $2.34 billion

Media General Inc said it would buy diversified media company Meredith Corp for about $2.34 billion to create the third-largest local TV station owner in the United States.
The combined company, to be named Meredith Media General, will initially have 88 TV stations that reach 30 percent of U.S. TV households, the companies said on Tuesday.
Meredith’s shares rose to $51 in premarket trading on Tuesday, just shy of the offer price of $51.53 per share in cash and stock. Media General’s shares rose 22.8 percent to $13.70.
Meredith, the publisher of magazines such as Shape, Family Circle and Better Homes and Gardens, has 17 TV stations including affiliates of CBS Corp, Twenty-First Century Fox Inc and Comcast Corp’s NBC.
Media General operates and services about 71 TV stations. The companies said they would divest or swap TV stations in six markets to get regulatory approval for the deal.
The acquisition is Media General’s second major deal in less than a year. The Richmond, Virginia-based company bought LIN Media for $1.6 billion in December.
Meredith shareholders will receive $34.57 in cash and 1.5214 shares of the new company for each share held, while Media General shareholders will receive one share of the combined company for each share held.
Meredith Media General will have pro-forma annual revenue of about $3 billion and will be headed by Meredith Chief Executive Stephen Lacy.
Including debt, the deal is valued at about $3.1 billion.
Media General shareholders will own about 65 percent of the new company after the transaction closes, with Meredith shareholders holding the rest.
The deal is expected to close by the end of June 2016.
RBC Capital Markets, Media General’s financial adviser for the deal, and JPMorgan Chase Bank will provide $2.8 billion in financing to the company.
BDT & Co and Moelis & Co were Meredith’s financial advisers.

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