A day after word leaked out that it had hired a financial advisor to shop the company to potential buyers; Nexstar confirmed that it is exploring “strategic alternatives,” including a possible sale. It is the second time that Nexstar has been on the auction block, with a previous sale attempt called off in 2007 after the market soured.
As our 2007 story noted, CEO Perry Sook (pictured) said it was likely that Nexstar would be seeking a sale again once the market improved. In fact, he called the action to end sale efforts only a “hiatus,” not an end to sale efforts. What has changed, though, is that Moelis & Company has been hired as the financial advisor to shop the company to potential buyers, rather than Goldman Sachs. Kirkland & Ellis LLP is serving as legal counsel.
It appears the market has recovered to the point where Nexstar could again command a price in excess of $1 billion and allow majority owner ABRY Partners to cash out. If Victor Miller, then a star analyst at Bear Stearns, was right in his 2007 commentary that ABRY’s basis for its Nexstar stake was about $12.50 per share, it will likely have to book a loss on its investment in the company which it took public in 1996.
In Thursday’s announcement, Nexstar emphasized that no decision had been made on any specific transaction and the company said it “does not intend to disclose developments with respect to the progress of its strategic review until such time as the Board has approved a transaction or otherwise deems disclosure appropriate.”
Nexstar owns, operates, programs or provides sales and other services to 65 television stations and related digital signals in 36 markets in 16 states and says it reaches approximately 13.5 million viewers or approximately 11.6% of all US television households. The stations are affiliates of NBC, CBS, ABC, Fox, MyNetworkTV, The CW, LATV, TV Azteca and Telemundo – plus a couple of new independents resulting from the company’s affiliation dispute with Fox. The company said its 35 community portal websites offer additional hyper-local content and verticals for consumers and advertisers.
RBR-TVBR observation: It is sort of a trip down memory lane to read those articles from 2007 about the previous sale attempt. One story quoted analyst Victor Miller at Bear Stearns and the other noted that Tribune Company had gotten its buyout financing in place, despite the tough debt market. Nexstar is still standing, but Bear Stearns is gone and Tribune remains mired in a long, long Chapter 11 bankruptcy proceeding.
Recent reports on Nexstar: