Nexstar is selling off 19 of its local TV stations in 15 markets to the tune of $1.32 billion in cash. Tegna and E.W. Scripps will be the recipients of those channels, which include New York City’s WPIX (that one for Scripps).
In December, Nexstar agreed to pay $4.1 billion to acquire Tribune Media. This purge of television stations is to comply with FCC rules and get the DOJ’s go-ahead on the Tribune transaction. It will also provide funds for Nexstar to help offset its larger deal’s debt.
“As with our prior acquisitions, we announced the Tribune transaction after developing a comprehensive regulatory compliance plan for required station divestitures and a detailed integration plan that will result in significant synergy realization,” Perry Sook, chairman, president and CEO of Nexstar, said on Wednesday. “The proposed divestitures announced today mark an important step in fulfilling Nexstar’s commitment to regulatory bodies to divest certain television stations in order to comply with the FCC local and national television ownership rules and to obtain FCC and Department of Justice approval of the proposed Nexstar/Tribune Media transaction.”
“The proposed sale of 11 stations to Tegna and eight stations to Scripps represent opportunities to transact with two established broadcast groups that share Nexstar’s commitment to upholding the FCC mandate and public interest principles of diversity and localism. From an economic standpoint, together the transactions represent a multiple of approximately 11.0 times the aggregate two year average broadcast cash flow of the stations to be divested,” Sook, who expects the Tribune deal to close in Q3, continued. “In addition, the net after-tax proceeds from the divestitures announced today exceed the estimates we shared at the time of the Tribune acquisition announcement.”
Separate from this sale agreement, Nexstar remains in “active negotiations” to divest two stations in Indianapolis, IN.
BofA Merrill Lynch is acting as financial advisor and Kirkland & Ellis LLP and Wiley Rein LLP are acting as legal counsel to Nexstar Media in connection with the proposed divestitures.
Below are the local stations being sold off, and to which buyer.
|Nexstar and Tribune Media Stations to be Divested|
|1||New York, NY||1||WPIX||CW||Tribune||Scripps|
|4||Salt Lake City, UT||30||KSTU||FOX||Tribune||Scripps|
|5||Hartford-New Haven, CT||33||WTIC/WCCT||FOX/CW||Tribune||Tegna|
|7||Norfolk-Portsmouth-Newport News, VA||44||WTKR/WGNT||CBS/CW||Tribune*||Scripps|
|8||Grand Rapids- Kalamazoo-Battle Creek, MI||49||WXMI||FOX||Tribune||Scripps|
|11||Wilkes Barre-Scranton, PA||62||WNEP||ABC||Tribune*||Tegna|
|12||Des Moines-Ames, IA||75||WOI/KCWI||ABC/CW||Nexstar||Tegna|
|14||Davenport, IA-Rock Island-Moline, IL||98||WQAD||ABC||Tribune||Tegna|
|15||Ft. Smith-Fayetteville-Springdale-Rogers, AR||101||KFSM||CBS||Tribune||Tegna|