Media General Rejects Nexstar’s Offer, But Invites It To Keep Talking

Media General isn’t saying “yes” to Nexstar’s $2.1 billion cash-and-stock offer. But it isn’t saying “no” to the suitor that wants to turn the companies into the nation’s No. 2 TV station owner.

In a response to Nexstar CEO Perry Sook’s statement this morning saying his bid is “at the limits of reasonable,” the Media General board says it “remains open to discussing and reviewing an improved proposal from Nexstar that would appropriately value the company.”

The broadcaster adds that in a letter on Sunday it “explicitly asked Nexstar to provide its ‘best and final’ proposal… Rather than providing a revised proposal and continuing private negotiations, we are surprised that Nexstar issued today’s press release reiterating its previous proposal which our Board had already unanimously rejected. We note that it is unclear from Nexstar’s press release if its current proposal is indeed its best and final proposal.”

Nexstar characterized the negotiations as being at an “impasse.” It had offered about $16.30 per share, but Media General wants $18.60.

Media General says today that the Nexstar bid “materially undervalues” the company. It’s also lower than the private offer in August of $17.00, which Media General directors “unanimously rejected.”

The board says that Media General deserves more now because “our business is gearing up towards a strong 2016 political year and promising retransmission repricings, which are a big source of growth in our projected cash flows.”

What’s more, Nexstar has lowballed the “financial and strategic value Media General would bring to a combination.”

The bottom line: Media General’s board says it “continues to recommend” that shareholders favor the $2.4 billion cash and stock offer it made for Meredith. That would create the No. 3 station owner with magazines led by Better Homes And Gardens, AllrecipesParents, Family Circle, and Shape.

And the ball’s back in Nexstar’s court.

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