Television companies to merge

Staff report

LIN Media, which owns 43 television stations — including WKBN, WYFX and WYTV in Youngstown — will merge with Media General to form the second-largest pure-play television broadcasting company in the country.

The combined company will include 74 network-affiliated owned or serviced TV stations across 46 markets and will reach 26.5 million, or approximately 23 percent, of U.S. TV households.

LIN Media and Media General made the announcement Friday in a joint news release.

Vincent L. Sadusky, LIN Media’s president and chief executive officer, will hold those same positions for the new company, which will be named Media General, according to the news release.

The companies’ current TV portfolio includes 33 Big Four network-affiliated TV stations located in the top 75 markets, 39 Big Four network-affiliated TV stations ranked No. 1 or 2 in their respective markets and the second-largest CBS affiliate group in the U.S., as measured by revenue.

Media General expects several of the stations to be swapped or otherwise divested in order to address regulatory considerations.

In addition to the websites associated with each TV station, Media General’s digital-media portfolio will include LIN Digital, LIN Mobile, Dedicated Media, HYFN, Nami Media and Federated Media. This portfolio is poised to grow rapidly.

J. Stewart Bryan III will continue to serve as chairman of the board, and the new company will remain headquartered in Richmond, Va.

“Our two companies share a deep commitment to operating top-rated stations, to providing our local markets with excellent journalism and to engaging in meaningful ways with the communities we serve,” said Bryan. “The prospects for digital media growth are particularly exciting.”

Douglas W. McCormick, chairman of the board of LIN Media, said, “We are pleased to have found an outstanding strategic business partner in Media General, with its strong stations, diverse footprint and commitment to lead the industry.”

Under the deal, LIN Media shareholders will receive aggregate consideration of $763 million in cash and 49.5 million shares in stock, via cash-election merger, which if prorated ratably among LIN Media shareholders, results in total consideration that approximates $27.82 per LIN share, based on Media General’s trailing 20-day volume weighted average stock price Wednesday.

ÔÇ∑Transaction enterprise value, including LIN Media’s net debt balance, is $2.6 billion.

Pro forma for the merger, LIN Media shareholders will own approximately 36 percent of the combined company, and existing Media General shareholders will retain approximately 64 percent ownership on a fully diluted basis.

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