Nexstar Confirms Deal to Buy Tribune Media
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.