In a deal set to create the largest operator of local television stations in the United States, Nexstar has agreed to acquire Tribune Media for $4.1 Billion
Nexstar’s Massive Media Footprint
Nexstar will acquire all of Tribune Media’s 42 stations in an all-cash deal. If approved, the deal will increase the company’s massive footprint in the local broadcast space by creating the largest owner and operator of local television stations in the country. If the deal goes through as expected, Nexstar will own and operate 216 television stations across 118 markets, including 8 of the nation’s 10 largest markets.
A Wise Business Venture
The deal will make Nexstar the largest owner an operator of local television stations in the nation, a distinction which is currently enjoyed by Sinclair Broadcasting. This new status as the nation’s largest local TV operator means the company will have access to potentially millions of more customers. However, the new acquisition allows Nexstar to enjoy other potential business ventures as well. As Bloomberg reported just today, the company is already attracting interest from investors for a group of televisions stations that it’s agreed to sell as part of the deal. The sale of those stations alone could net Nexstar as much as $1 billion.
The Deal is the Result of a Failed Sinclair Bid
The deal comes just four months after Sinclair Broadcasting’s bid to buy Tribune, fell-through. That deal was called off due to stated ‘ideological favoritism’ stemming from Sinclair’s close associations with the Trump administration. With the included assumption of all of Tribune’s debt, the total deal is valued at more than $6.4 billion. That is a far cry from the $3.9 originally offered by Sinclair for Tribune earlier in the year.
A Strategic Investment
According to company chairman and CEO Perry Sook, “Nexstar has long viewed the acquisition of Tribune Media as a strategically, financially and operationally compelling opportunity that brings immediate value to shareholders of both companies.” Nexstar will pay $46.50 per share for Tribune’s outstanding stock representing a 15% premium on Tribune’s Friday closing price.
Whether or not the deal will prove prudent for the media company remains to be seen, but if approve, the deal is expected to close sometime in the first half of 2019.