Nexstar Media Group’s $6.4 Billion Acquisition of Tribune Media

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 transaction. Moelis & Company and Guggenheim Securities are acting as financial advisors to Tribune Media and Debevoise & Plimpton LLP and Covington & Burling LLP are acting as its legal counsel.

Nexstar Media Group, Inc. (Nasdaq: NXST) and Tribune Media Company (NYSE: TRCO) have entered into a definitive merger agreement whereby Nexstar will acquire all outstanding shares of Tribune Media for $46.50 per share in a cash transaction that is valued at $6.4 billion including the assumption of Tribune Media’s outstanding debt. The transaction reflects a 15.5% premium for Tribune Media shareholders based on its closing price on November 30, 2018, and a 45% premium to Tribune Media’s closing price on July 16, 2018, the day the FCC Chairman issued a public statement regarding his intention to circulate a Hearing Designation Order for Tribune Media’s previously announced transaction with a third party. Tribune Media shareholders will be entitled to additional cash consideration of approximately $0.30 per month if the transaction has not closed by August 31, 2019 (pro-rated for partial months and less an adjustment for any dividends declared on or after September 1, 2019). The transaction has been approved by the boards of directors of both companies and is expected to close late in the third quarter of 2019, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.

Upon closing, the transaction is expected to be immediately accretive to Nexstar’s operating results inclusive of expected operating synergies of approximately $160 million in the first year following the completion of the transaction and planned divestitures. The proposed transaction will combine two leading local media companies with complementary national coverage and will reach approximately 39% of U.S. television households pro-forma for anticipated divestitures and reflecting the FCC’s UHF discount. The transaction is not subject to any financing condition and Nexstar has received committed financing for the transaction from BofA Merrill Lynch, Credit Suisse and Deutsche Bank.

Following the completion of the transaction, Nexstar will benefit from increased operational and geographic diversity and scale as a result of Tribune Media’s diverse portfolio of media assets including 42 owned or operated broadcast television stations in major U.S. markets; compelling local news and entertainment content creation; significant broadcast distribution; a reinvigorated general entertainment cable network, WGN America; a 31% ownership stake in TV Food Network, which is a top tier cable asset; and equity investments in several digital media businesses. The combined entity will be one of the nation’s leading providers of local news, entertainment, sports, lifestyle and network programming through its broadcast and digital media platforms with pro-forma annual revenue of approximately $4.6 billion (2018/2019 average) and pro-forma adjusted EBITDA of approximately $1.7 billion (2018/2019 average). With 216 combined, pre-divestiture full power, owned or serviced, television stations in 118 markets and rapidly growing digital media operations, Nexstar will continue its commitment to localism and innovation and offer superior engagement across all devices, including large-scale reach to U.S. television households and online users.

Kirkland & Ellis LLP advised Nexstar Media Group, Inc. with a team including corporate partners Sarkis Jebejian (Picture), Armand Della Monica and Ravi Agarwal and associates Laura Umbrecht and Gisella de la Rocha; financing partners Joshua Korff, Ashley Gregory, Brian Hecht and Yuli Wang; tax partners Dean Shulman and Vincent Thorn; executive compensation partner Michael Krasnovsky and associate Julia Onorato; and antitrust partners Ian John and Peter McCormack.

Debevoise & Plimpton LLP is advising Tribune Media Company with a team including Paul S. Bird and Jonathan E. Levitsky and includes partners Peter A. Furci, Meir D. Katz and Scott B. Selinger and associates Benjamin P. Collins-Wood, Kevin R. Grondahl, Jose Angel Lamarque III, Molly F. Stockley and Meredith Wren

 

Involved fees earner: Paul Bird – Debevoise & Plimpton; Jonathan Levitsky – Debevoise & Plimpton; Benjamin Collins-Wood – Debevoise & Plimpton; Jose Angel Lamarque III – Debevoise & Plimpton; Molly Stockley – Debevoise & Plimpton; Meredith Wren – Debevoise & Plimpton; Peter Furci – Debevoise & Plimpton; Meir Katz – Debevoise & Plimpton; Scott Selinger – Debevoise & Plimpton; Kevin Grondahl – Debevoise & Plimpton; Sarkis Jebejian – Kirkland & Ellis; Armand Della Monica – Kirkland & Ellis; Ravi Agarwal – Kirkland & Ellis; Laura Umbrecht – Kirkland & Ellis; Gisella de la Rocha – Kirkland & Ellis; Joshua Korff – Kirkland & Ellis; Ashley Gregory – Kirkland & Ellis; Brian Hecht – Kirkland & Ellis; Yuli Wang – Kirkland & Ellis; Dean Shulman – Kirkland & Ellis; Vincent Thorn – Kirkland & Ellis; Michael Krasnovsky – Kirkland & Ellis; Julia Onorato – Kirkland & Ellis; Ian John – Kirkland & Ellis; Peter McCormack – Kirkland & Ellis;

Law Firms: Debevoise & Plimpton; Kirkland & Ellis;

Clients: Tribune Media Company; Nexstar Media Group Inc.;