Report: Media General's shareholders rebel against $2.4B bid for Meredith amid Nexstar intrusion

According to a report from the NY Post citing unnamed sources familiar with the situation, Media General doesn't have enough shareholder support to acquire Meredith for $2.4 billion. The merger would have created the third largest TV station operator in the United States.

Media General declined to comment on the report, according to the NY Post.

The news comes just days after Nexstar Broadcasting Group launched a $4.1 billion hostile takeover of Media General -- a bid that is predicated on Media General dropping its pursuit of Meredith.

Indeed, reports indicate that a growing number of Media General's major shareholders do not support the company's proposed purchase of Meredith. The NY Post earlier this week reported that Oppenheimer, which owns 7 percent of Media General, does not support the company's bid for Meredith. And before that, Media General shareholder Starboard Capital went public against the deal; Starboard owns 4.5 percent of Media General.

Moreover, The Street reports that other major Media General shareholders are supporting Nexstar's offer for Media General. According to the publication, Neuberger Berman Group (which holds 6 percent of Media General), Roystone Capital Management (which holds 3 percent) and Penn Capital (which holds about 2 percent) have all issued support for Nexstar's bid to acquire Media General.

Nexstar's bid for Media General, issued Sept. 28, would terminate the proposed merger between Media General and Meredith and would instead combine Nexstar's 91 TV stations with Media General's 71 stations in 48 markets. The move would form the nation's third largest TV station group.

Nexstar's hostile bid for Media General followed Media General's Sept. 8 announcement that it would merge with Meredith in a $2.4 billion transaction, creating a company that would control 88 TV stations in 54 markets, reaching 30 percent of the country. 

Nexstar, Media General and Meredith are among seemingly dozens of TV stations around the country engaged in consolidation. For example, Gray Television recently agreed to pay $442.5 million to acquire Schurz Communications. And in 2014, E.W. Scripps bought Journal Broadcast Group, and Sinclair purchased Allbritton's stations. 

The wave of broadcast consolidation comes as station owners are seeking greater scale and heft to offset mergers and consolidation in the pay-TV market.

For more:
- see this NY Post article
- see this Street article

Related articles:
Blackout Thursday: DirecTV comes to terms with Media General; Dish and U-verse still haggling with station groups
Nexstar makes $4.1B hostile bid for Media General as broadcast consolidation binge kicks into overdrive
Media General and Meredith to form third biggest TV station group in U.S. with $2.4B merger

Article updated Oct. 7 to clarify the status of Media General's bid for Meredith.

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