$1.6 Billion Media Merger in the Works as Wave of Consolidation Continues B&C
While opponents continue to voice their concerns about one proposed media merger, another one is now in the works. On the heels of the $45 billion Comcast purchase of Time Warner Cable announced last month, news of a smaller -- but still significant --merger between Media General and LIN Media has surfaced.
"Fresh off its merger with Young Broadcasting, Media General plans to combine with LIN Media to form what they called the second-largest television broadcasting company," B&C reports. "The combined company will have 74 network-affiliate owned or serviced TV stations in 46 markets, reaching about 23% of U.S. households. The transaction is subject to regulatory approval."
The new company would be called Media General and would get LIN's president and CEO, Vincent Sadusky, as its president and CEO.
"Media General will remain headquartered in Richmond," B&C notes. "J. Stewart Bryan III will continue to serve as chairman of the board."
Said Bryan: “Combining Media General and LIN Media will create the second-largest pure-play TV broadcasting company in the United States, a financially strong organization that will have opportunities for profitable growth greater than either company could achieve on its own. Our two companies share a deep commitment to operating top-rated stations, to providing our local markets with excellent journalism and to engaging in meaningful ways with the communities we serve.”
The report adds: "LIN shareholders are to receive an aggregate consideration of $763 million in cash and 49.5 million shares in stock, for a total value of $1.6 billion. The transaction enterprise value, including LIN Media’s net debt balance, is $2.6 billion, according to the companies. Pro forma for the merger, LIN Media shareholders will own approximately 36% of the combined company and Media General shareholders will retain approximately 64% ownership."
The combined company would become one of the top 10 station groups in the country, the report notes, passing ABC and Hearst TV.