Date
12 December 2018
The tower of Tribune Broadcasting affiliate KTLA 5 in Hollywood, California. Including debt, the deal to buy Tribune Media is worth US$6.4 billion. Photo: Reuters
The tower of Tribune Broadcasting affiliate KTLA 5 in Hollywood, California. Including debt, the deal to buy Tribune Media is worth US$6.4 billion. Photo: Reuters

US broadcaster Nexstar to buy Tribune Media for US$4.1 billion

Nexstar Media Group said it has agreed to buy Chicago-based peer Tribune Media Company for about US$4.1 billion in cash, a deal that would make it the largest regional TV station operator in the United States, Reuters reports.

Nexstar said on Monday it will pay US$46.50 per share, representing a premium of 15.5 percent to Tribune’s closing price on Friday. Including debt, the transaction is worth US$6.4 billion.

In August, Sinclair Broadcast Group Inc.’s attempt to buy Tribune in a US$3.9 billion deal collapsed over regulatory hurdles.

However, since then the broadcast media sector has seen a flurry of merger talks, amid expectations that the US Federal Communications Commission (FCC) could relax restrictions on how many stations broadcasters can operate.

Irving, Texas-based Nexstar said the transaction is subject to approvals by Tribune’s shareholders and regulators including the FCC. The company intends to divest certain television stations necessary to comply with regulatory ownership limits.

Nexstar owns, operates and provides sales and other services to 174 television stations reaching nearly 39 percent of all US television households, while Tribune Media owns or operates 42 local television stations reaching approximately 50 million households.

Nexstar outbid private equity firm Apollo Global Management LLC with an all-cash offer, three sources had told Reuters.

The deal, expected to close late in the third quarter of 2019, will add about US$160 million in the first year to Nexstar’s earnings, the companies said.

“The transaction will result in approximately 46 percent growth in Nexstar’s average annual free cash flow in the 2018-2019 cycle to approximately US$900 million,” Nexstar’s chief executive Perry Sook said in a statement.

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RC/CG

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