Shareholders are on-board with the planned Nexstar acquisition of Media General.
Now the companies await regulatory approval.
Under the deal announced in January, Nexstar would acquire outstanding shares of Media General for $10.55 per share in cash and 0.1249 of a share of Nexstar Class A common stock for each Media General share. The agreement also factors in any proceeds MG may receive from the sale of any station spectrum in the incentive auction.
Conservatively, the companies predict they’ll see some $76 million in cost-savings in the first year from combining their efforts.
The new entity, to be named “Nexstar Media Group,” is expected to generate $500 million of average annual free cash flow, with annual free cash flow per share expected to approximate $11.15 per year over the 2016/2017 period on a pro forma basis.
Nexstar Chairman/President/CEO Perry Sook said “We intend to initially allocate free cash flow to leverage reduction and expect covenant leverage to approximate 4.5x by year end 2016, assuming no net proceeds from the FCC’s incentive auction.” Executives plan to begin financing work related to the deal in the coming weeks and to pursue regulatory approvals after that.
Media General President/CEO Vince Sadusky called the shareholder votes approving the transaction an “important step” to providing shareholders “the opportunity to participate in the significant upside potential of the combined company.”