Planned Sales Reflects Nexstar’s
Comprehensive Regulatory Compliance Plan to Secure Requisite
Approvals for Tribune Media Company Transaction
Nexstar Media Group, Inc. (Nasdaq: NXST) (“Nexstar”) and Tribune
Media Company (NYSE: TRCO) (“Tribune Media”) announced today that
Nexstar has entered into definitive agreements to sell a total of
nineteen stations in fifteen markets for an aggregate $1.32 billion
in cash following the acquisition of Tribune Media by Nexstar.
Under the terms of the agreements, TEGNA Inc. (NASDAQ: TGNA)
(“Tegna”) will acquire eleven stations in eight markets for $740
million and The E.W. Scripps Company (NASDAQ: SSP) (“Scripps”) will
acquire eight stations in seven markets for $580 million.
Separately, Nexstar remains engaged in active negotiations to
divest two stations in Indianapolis, Indiana.
On December 3, 2018, Nexstar and Tribune Media entered into a
definitive merger agreement whereby Nexstar will acquire all
outstanding shares of Tribune Media. The planned divestiture of
nineteen stations reflects Nexstar’s stated intention to divest
certain television stations in order to comply with the FCC local
and national television ownership rules and to obtain FCC and
Department of Justice (“DOJ”) approval of the proposed Nexstar /
Tribune Media transaction.
Nexstar intends to use the net proceeds from the divestitures to
fund the Tribune acquisition and to reduce debt. Given that the net
proceeds from the divestitures exceed those initially estimated at
the time the transaction was announced, Nexstar now estimates that
net leverage at the closing of the transaction will be reduced to
approximately 5.1x.
The planned divestiture of the nineteen stations below is
subject to FCC approval, other regulatory approvals, the closing of
the Nexstar / Tribune Media transaction and other customary closing
conditions and is expected to be completed on, or about the time
of, the closing of the Nexstar / Tribune Media transaction, which
is expected later this year.
Nexstar and Tribune Media Stations to be Divested
Market DMA
Station Affiliation
Seller Buyer 1 New York,
NY 1 WPIX CW Tribune
Scripps 2 Phoenix, AZ 12
KASW CW Nexstar Scripps 3
Miami-Ft. Lauderdale 16 WSFL
CW Tribune Scripps 4
Salt Lake City, UT 30 KSTU FOX
Tribune Scripps 5
Hartford-New Haven, CT 33 WTIC/WCCT
FOX/CW Tribune Tegna 6
Harrisburg-Lancaster-Lebanon-York, PA 41 WPMT
FOX Tribune Tegna 7
Norfolk-Portsmouth-Newport News, VA 44
WTKR/WGNT CBS/CW Tribune*
Scripps 8 Grand Rapids- Kalamazoo-Battle Creek, MI 49
WXMI FOX Tribune
Scripps 9 Memphis, TN 51
WATN/WLMT ABC/CW Nexstar
Tegna 10 Richmond-Petersburg, VA 56
WTVR CBS Tribune Scripps
11 Wilkes Barre-Scranton, PA 62 WNEP
ABC Tribune* Tegna 12
Des Moines-Ames, IA 75 WOI/KCWI
ABC/CW Nexstar Tegna 13
Huntsville-Decatur-Florence, AL 79 WZDX
FOX Nexstar Tegna 14
Davenport, IA-Rock Island-Moline, IL 98 WQAD
ABC Tribune Tegna 15
Ft. Smith-Fayetteville-Springdale-Rogers, AR 101
KFSM CBS Tribune
Tegna
* Stations licensed to Dreamcatcher Broadcasting, LLC, to which
Tribune currently provides services pursuant to contractual
arrangements
Perry Sook, Chairman, President and CEO of Nexstar, commented,
“As with our prior acquisitions, we announced the Tribune
transaction after developing a comprehensive regulatory compliance
plan for required station divestitures and a detailed integration
plan that will result in significant synergy realization. The
proposed divestitures announced today mark an important step in
fulfilling Nexstar’s commitment to regulatory bodies to divest
certain television stations in order to comply with the FCC local
and national television ownership rules and to obtain FCC and
Department of Justice approval of the proposed Nexstar / Tribune
Media transaction.
“The proposed sale of eleven stations to Tegna and eight
stations to Scripps represent opportunities to transact with two
established broadcast groups that share Nexstar’s commitment to
upholding the FCC mandate and public interest principles of
diversity and localism. From an economic standpoint, together the
transactions represent a multiple of approximately 11.0 times the
aggregate two year average broadcast cash flow of the stations to
be divested. In addition, the net after tax proceeds from the
divestitures announced today exceed the estimates we shared at the
time of the Tribune acquisition announcement, while the cash flow
to be divested, inclusive of the elimination of certain synergies,
is less than those in our prior projections. Taken together, these
factors reinforce our confidence that the Tribune transaction will
result in approximately 46% growth in Nexstar’s average annual free
cash flow in the 2018/2019 cycle to approximately $900 million, or
approximately $19.50 per share, per year based on approximately
46.2 million Nexstar shares outstanding. Nexstar has committed
financing for the transaction and has made all required FCC and
other regulatory applications, and subject to securing requisite
approvals we continue to expect to complete the transaction late in
the third quarter of 2019.”
BofA Merrill Lynch is acting as financial advisor and Kirkland
& Ellis LLP and Wiley Rein LLP are acting as legal counsel to
Nexstar Media in connection with the proposed divestitures.
About Nexstar Media Group, Inc.
Nexstar Media Group is a leading diversified media company that
leverages localism to bring new services and value to consumers and
advertisers through its traditional media, digital and mobile media
platforms. Nexstar owns, operates, programs or provides sales and
other services to 174 full power television stations and related
digital multicast signals reaching 100 markets or nearly 39% of all
U.S. television households. Nexstar’s portfolio includes primary
affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW. Nexstar’s
community portal websites offer additional hyper-local content and
verticals for consumers and advertisers, allowing audiences to
choose where, when and how they access content while creating new
revenue opportunities. For more information please visit
www.nexstar.tv.
Forward-Looking Statements
This communication includes forward-looking statements. We have
based these forward-looking statements on our current expectations
and projections about future events. Forward-looking statements
include information preceded by, followed by, or that includes the
words "guidance," "believes," "expects," "anticipates," "could," or
similar expressions. For these statements, Nexstar Media and
Tribune Media claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The forward-looking statements
contained in this communication, concerning, among other things,
the ultimate outcome, benefits and cost savings of any possible
transaction between Nexstar Media and Tribune Media and timing
thereof, and future financial performance, including changes in net
revenue, cash flow and operating expenses, involve risks and
uncertainties, and are subject to change based on various important
factors, including the timing of and any potential delay in
consummating the proposed transaction; the risk that a condition to
closing of the proposed transaction may not be satisfied and the
transaction may not close; the risk that a regulatory approval that
may be required for the proposed transaction is delayed, is not
obtained or is obtained subject to conditions that are not
anticipated, the risk of the occurrence of any event, change or
other circumstance that could give rise to the termination of the
Merger Agreement; the risk that Nexstar Media fails to obtain the
necessary financing arrangements set forth in the debt commitment
letters delivered pursuant to the Merger Agreement, the impact of
changes in national and regional economies, the ability to service
and refinance our outstanding debt, successful integration of
Tribune Media (including achievement of synergies and cost
reductions), pricing fluctuations in local and national
advertising, future regulatory actions and conditions in the
television stations' operating areas, competition from others in
the broadcast television markets, volatility in programming costs,
the effects of governmental regulation of broadcasting, industry
consolidation, technological developments and major world news
events. Unless required by law, Nexstar Media and Tribune Media
undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this
communication might not occur. You should not place undue reliance
on these forward-looking statements, which speak only as of the
date of this release. For more details on factors that could affect
these expectations, please see Tribune Media’s and Nexstar Media’s
filings with the Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190320005273/en/
Thomas E. CarterChief Financial OfficerNexstar Broadcasting
Group, Inc.972/373-8800
Joseph Jaffoni, Jennifer NeumanJCIR212/835-8500
ornxst@jcir.com
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