Media company Nexstar is soon going to acquire Tribune Media’s 42 television stations with exchange of $4.1 billion. This deal will give Nexstar the largest collection of local TC station in the USA. Nexstar which is based on Irving, Texas will expand to a total number of 216 stations in 118 markets, covering nearly half of the US upon completion of the deal. In addition to WGN, Nexstar gets Tribune’s stations in L.A., New York, Philadelphia and Chicago, and a 31 percent ownership stake in the Food Network.
Before four months, Chicago based Tribune Media called off a planned $3.9 billion sale to Sinclair Broadcast group and breached its contract by misleading regulators during the transaction’s approval process. The previous merger would have expanded the holdings of Sinclair, currently the nation’s largest US broadcaster with 191 stations, 215 TV stations and a reach of 71% of US homes. The acquisition of Tribune Media will now place Nexstar stations in 18 of nation’s top 25 markets and 37 of the top 50 markets while exceptionally expanding its geographical diversity,, said Chainman and CEO Perry Sook. He also added “Nexstar has long viewed the acquisition of Tribune Media as a strategically, financially and operationally compelling opportunity that brings immediate value to shareholders of both companies” to his statement.
Now Nexstar will pay $46.50 per share for each outstanding Tribune Media Share, a 15% premium to the closing price on Friday. Nexstar will also assume tribune Media’s outstanding debt, pushing the total value of the merger transaction to $6.4 billion, the company state in an announcement Monday. The combined company is expected to generate a huge revenue of $4.6 billion. With the merger news, Nexstar shares rose 1% in premarket trading to $83.60, while Tribune Media shares approx 10% rose to $44.23.