Nexs­tar Con­firms Deal to Buy Tri­bune Me­dia

L'Opinion - - Protection Sociale Des Indépendants - Mi­cah Mai­den­berg

Nexs­tar Me­dia Group Inc. confir­med it plans to ac­quire Tri­bune Me­dia Co. in a deal that would make the com­pa­ny the lar­gest ope­ra­tor of lo­cal te­le­vi­sion sta­tions in the country.

Nexs­tar, ba­sed in Ir­ving, Texas, said Mon­day it will pay $46.50 a share in cash for Tri­bune Me­dia’s outs­tan­ding stock for a to­tal out­lay of about $4.1 bil­lion. Nexs­tar va­lued the deal at about $6.4 bil­lion in­clu­ding debt.

Shares of Tri­bune Me­dia jum­ped 10% in pre­mar­ket tra­ding Mon­day, and clo­sed last week at $40.26, mea­ning Nexs­tar’s of­fer is a 15.5% pre­mium to that price.

Nexs­tar mo­ved to ac­quire Tri­bune Me­dia af­ter ri­val Sin­clair Broad­cast Group ran in­to chal­lenges as it loo­ked to close its $3.9 bil­lion mer­ger bid for the Chi­ca­go-ba­sed com­pa­ny ear­lier this year. In Ju­ly, Fe­de­ral Com­mu­ni­ca­tions Com­mis­sion Chair­man Ajit Pai said he had concerns with how Sin­clair pro­po­sed to di­vest of some of Tri­bune’s sta­tions. Tri­bune ter­mi­na­ted the deal in Au­gust and sued Sin­clair, saying its ef­forts to win re­gu­la­to­ry ap­pro­val was in­suf­fi­cient.

The pro­po­sed com­bi­na­tion bet­ween Nexs­tar and Tri­bune Me­dia would create the lar­gest lo­cal TV-sta­tion ope­ra­tor in the country. Nexs­tar owns, ope­rates or ser­vices 174 sta­tions, while Tri­bune Me­dia has 42. Tri­bune Me­dia al­so owns the cable net­work WGN Ame­ri­ca and a 31% stake in the TV Food Net­work. The com­bi­ned en­ti­ty is ex­pec­ted to ge­ne­rate $4.6 bil­lion in re­ve­nue and pro­duce $1.7 bil­lion in ad­jus­ted ear­nings be­fore in­ter­est, taxes, de­pre­cia­tion and amor­ti­za­tion.

Nexs­tar ex­pects $160 mil­lion in cost sa­vings af­ter the deal closes. The com­pa­ny said in a sta­te­ment when the deal closes it “will continue its com­mit­ment to lo­ca­lism and in­no­va­tion and of­fer su­per­ior en­ga­ge­ment across all de­vices, in­clu­ding large-scale reach to U.S. te­le­vi­sion hou­se­holds and on­line users.”

Sha­re­hol­ders of Tri­bune Me­dia will al­so be en­tit­led to about 30 cents a share per month if the tran­sac­tion isn’t com­ple­ted by Aug. 31 of next year. The com­pa­nies ex­pect the deal to close late in the third quar­ter in 2019.

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