Media General to buy LIN in $2.6 bn US broadcast deal

Mar 21, 2014

US broadcaster Media General said Friday it will buy LIN Media in a $2.6 billion deal that creates the nation's second-largest television broadcasting company and a digital media powerhouse.

The merged will own and operate or service 74 television stations across 46 markets, and serve some 26.5 million households, or 23 percent of the US market, Media General said in a statement.

The stock-and-cash merger pays about LIN $27.82 per share, a 28 percent premium for the multimedia company.

Media General will pay $763 million in cash and the equivalent of $858 million in shares, based on its closing share price on Thursday.

In addition, Media General will assume LIN's debt of $968 million, bringing the total value of the transaction to $2.6 billion.

Media General, partly owned by tycoon Warren Buffett's Berkshire Hathaway, will form a new holding company that will be named Media General.

"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," Media General chairman J. Stewart Bryan said in the statement.

"The prospects for digital media growth are particularly exciting."

In addition to the websites associated with each TV station, the new Media General will have a portfolio that includes LIN Digital, LIN Mobile, Dedicated Media, HYFN, Nami Media and Federated Media.

LIN will own about 36 percent of the new company, which will remain headquartered in Richmond, Virginia. General Media noted that some of the TV stations may have to swapped or sold to address regulatory issues.

The deal is subject to shareholders and regulatory approval. The companies expect the transaction to close in early 2015.

Investors liked the deal. Shares in Media General surged 4.7 percent to $18.15 and LIN surged 22.1 percent to $26.23.

The new company will rank second to Tribune Company, which became the largest US commercial TV station owner in 2013 after buying Local TV for $2.7 billion in cash.

Media General had been in the newspaper business for more than 160 years when it started selling off newspapers in 2012 as the industry struggled in the face of digital competition.

It sold 63 newspapers to Buffett's Berkshire Hathaway for $142 million in cash, saying it would use the proceeds to pay down debt. Berkshire holds a stake in Media General.

Explore further: Liberty Media bids for full ownership of Sirius XM

add to favorites email to friend print save as pdf

Related Stories

Recommended for you

As dust clears, what's next for Sony?

6 hours ago

The Sony hacking attack continues to deliver more dramatic plotlines than any fictional movie, but meanwhile the movie studio must move forward and tackle the next steps in minimizing the mess. Will Sony ...

It's down to the wire for online shopping

10 hours ago

As the holiday shopping season winds down, FedEx, UPS and online retailers are using the last few days to try to avoid the problems that occurred last year when severe winter weather and a surge in late orders ...

China's Xiaomi raises more than $1 bn in funding

Dec 21, 2014

China's top smartphone seller Xiaomi Corp. is raising more than $1 billion in a fresh round of funding, a move which would raise its valuation above $45 billion, a report said Sunday.

Why the Sony hack isn't big news in Japan

Dec 20, 2014

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

foolspoo
not rated yet Mar 21, 2014
Anti-trust? free market? who cares, were rich!

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.