I think MEG BOD's have already shown they have their own
game plan. However, pressure is building to scuttle the MDP deal as you know. I
don't remember any time in last 10 years +/- where there has been an unfriendly takeover of a broadcaster. They both have to sign FCC license transfer. It could end up taking the FCC almost forever to approve everything in that scenario. The fact that MEG BOD's virtually ignored
NXSTand went out and did another deal says something. The supposed $17 offer with MEG actually trading at $18 as a 52 week high could help justify their refusal. This deal isn't going to go for $14.50 if it goes IMVHO. With all the ambulance chasers filing class actions, the MEG BOD's to protect themselves cannot take less than $17 for MEG. If NXST offered say $18+, the MEG BOD's could say this is why we didn't
take the first offer. The deal should be at 10-15% above $18 the 52 week high. I think we may see a $19-20 offer before it's over. The drop in MDP pretty much says that deal is off the table.....but
MDP could come back and make an offer for MEG as well. The MDP deal IMVHO was
structured for MDP management to survive and run both companies. It makes sense when you think about it as MEG management has no experience in publishing. MDP may well see the deal as necessary to
their survival as well. I would not be surprised to see SBGI enter the bidding. We may yet see
a White Knight. For the record I have zero shares of MEG or NXST but thinking about buying MEG on any further weakness. DaninFW
Sentiment: Strong Buy
Even worse MEG didn't even officially reject the offer, it simply ignored it, they didn't even respond or engage in any discussions with NXST. One week later they announced the deal with MDP. I was actually OK with the MDP merger agreement on the basis they were buying a better management. I would not have been in favor of the deal if I knew there was a chance of negotiating a deal with NXTR north of $17. When the LIN deal closed the payout was pro-rated to some cash and some shares. No one was able to receive all cash. The shares have declined from $17.70 since the LIN Merger less than 9 months ago, to under $10 after the MDP announcement.. the shareholders want a better deal. At minimum it should be 15% above the 52 week high. That would mean a minimum offer of $20.70. As holder of 15,000 shares most from conversion of LIN stock on December 18, 2014, I have come to the conclusion the the BOD of MEG are incompetent and not acting in the best interest of shareholders.
is there any sort of timing issue here? I remember NXST saying they wanted to get something done w/in 60 days...Whether it regards MDP or NXST bid...I realize it's MEG's turn to say something...
I suspect the MEG Board will come back with a 25% premium demand over the most recent high $17.70 which would be $22.13. MEG Board will try to convince shareholders that $14.50 is an inferior offer taking advantage of temporary recent lows in the Media sector. I don't think NXST will accept this counter offer and will go hostile with an offer to MEG shareholders at $17 or $18. I believe one way or the other, the Meredith deal will not go forward.
The headline value what they offer is not relevant. What is relevant is the cash component and the % of the combine company that MEG shareholders will own. The current offer could be better than the $17 offer. The reason being is that both (pretty much all) stocks are lower. I don't think NXST has much room on the cash portion of the offer, this is because they don't want to lever up the balance sheet too high. I think they could offer MEG shareholders roughly 40% of the new company (as opposed to 26% in their original offer) and still have it be substantially accretive to NXST shareholders. The NXST/MEG combo has more synergies and attractive characteristics than the MEG/MDP deal. At 40%, I believe the new NXST would generate about $9 per share in FCF. Throw whatever multiple you want on that number to get your target, but that's better than NXST current $7.65 guidance. So as a MEG shareholder, I look at as I cash out, and I get a decent amount of shares in the new company that I believe will double from current levels. FYI, the 40% number would be roughly $18 with the current stock prices.
As a MEG shareholder I have to admit, this is fun. Maybe MDP comes back and decides to buy MEG or a 3rd party joins the fight. Starboard and other shareholders won't allow MEG to play games, I think everyone wants a good deal to get done, but if MEG doesn't something shady they will lay down the hammer by kicking out the board. Fun stuff.
I have been in and out more times than I can count on MEG but actually out now. Both parties have to sign FCC license transfers. Ain't gonna happen unless NXST offers at least the $17 they offered before. DaminFW
They offered $17 in August and it was rejected. Surely, $14.50 wouldn't be accepted now. I've got 5,000 shares and I'm holding out for a much better deal. I'm with you on the $17+
I laughed for an hour. Ryvicker tells MEG shareholders to sell because NXST will double if they do.......looks like MEG getting peanuts. This deal will go for $17+..........DaninFW
Look pal, I understood the "A" and "B" stock structure. OK. I understand that it no longer exist. I understand the shareholders will vote on this. OK
My point is and it appears to be getting by you is J. Stewart Bryan is Chairman of the stupid board. He and his cronies will decide what is best for you and let the votes fall where they may. Understand? Evidence no word about the earlier offer.
But now shareholders get to vote and decide. They will also kick the board out if they have too. The new share structure changes everything. This will be fun to watch.
He is still chairman of the stupid board. The board is mixed big time now but as of this last offer he is still in charge. He has more old members (good ol' boys) on his side than not.
But it's not up to him anymore. He use to have a special share of stock, that is no longer the case. It's a whole new ball game.
Yeah the bod does have a fiduciary duty to look at it just as they did last month when Nexstar made a private offer. Did the bod notify shareholders of the offer. Nope
If I owned a single share of MEG at this point I would sell it right here so fast it would make your head spin. Trust me as an ex employee I owned over 6000 shares. J Stewart Bryan couldn't give a rats behind about shareholders or employees.
Nexstar offered $17 a share on August 10, now they see a chance to grab it for nearly $320 million less. MEG's BOD better get this this stock back above $17 fast or the lawyers will be swarming. The MEG assets are compelling but OMG, the management is not making investors any money.
mediatrader is absolutely correct, however Kim doesn't have a blocking position, majority of shareholders will want the NXST deal. BOD have a fiduciary duty, negotiating a deal with NXST is better than the deal they have done with MDP. NXST is smart to take advantage of this ugly market.