Meredith sold to a Virginia company
BUSINESS RECORD STAFF Sep 8, 2015 | 4:26 pm
3 min read time
738 wordsAll Latest News, Retail and Business
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Meredith Corp. has been sold for about $2.4 billion in cash and stock to television station owner Media General Inc. of Richmond, Va.
Under the agreement, Meredith Chairman and CEO Steve Lacy will be president and CEO of a new company called Meredith Media General, which will have offices in Des Moines and Richmond. The new company will be incorporated in Virginia.
Media General will dominate the board of directors. Current company chairman J. Stewart Bryan III will be chairman of Meredith Media General. Media General will appoint eight board members, and Meredith will appoint four.
Joseph Ceryanec, current Meredith vice president and chief financial officer, will be the CFO of Meredith Media General.
The balance of Meredith Media General’s senior management team will be a combination of the two existing executive teams, according to a release.
Meredith will remain committed to Greater Des Moines, Lacy told Meredith workers in a memo this morning, after the merger was announced to the news media.
“Meredith will maintain its significant business and community presence in Des Moines, as well as our other major locations around the country. We will continue our charitable giving, and supporting all the volunteer work done by our employees.”
Meredith shareholders will receive cash and stock valued at $51.53 per share, which represents a 12 percent premium to Meredith’s closing stock price on Sept. 4. Both classes of Meredith common stock will receive the same consideration per share. Based on Meredith’s net debt balance of $772 million at June 30, the total value of the deal is approximately $3.1 billion.
Media General shareholders will receive one share of the new holding company for each share of Media General they own upon closing. Meredith shareholders will receive $34.57 in cash and 1.5214 shares of the new holding company for each share of Meredith they own upon closing. When the transaction is completed, Media General shareholders will own approximately 65 percent and Meredith shareholders will own approximately 35 percent of the fully diluted shares of Meredith Media General, according to the release.
D. Mell Meredith Frazier, a director of Meredith, and her brother E.T. “Tom” Meredith IV, who together beneficially own 63 percent of the Meredith Class B common stock, have agreed to vote in favor of the transaction. In addition, there will be a separate class vote by the Meredith common shareholders and a separate vote of both classes voting together, according to the release.
Affiliates of Standard General LP, which hold approximately 14.5 percent of Media General’s shares, have also agreed to vote in favor of the transaction.
Media General operates or services 71 television stations, while Meredith owns 17 television stations. Meredith also brings its publishing and multimedia operations to the deal.
Meredith Media General is expected to have about $3 billion in annual revenue, nearly double Meredith’s current revenues. The company will be the the third largest owner of television stations and will have to swap or sell stations in six markets because of regulatory concerns, according to the release.
“This merger creates greater opportunities for profitable growth than either company could achieve on its own,” Media General’s Bryan said in the release.
Lacy answered the “why” question in the memo to employees: “As discussed at our all-employee meetings this year, the media landscape is increasingly competitive, and we need to increase our scale to continue as a leading media and marketing company and grow shareholder value.”
The deal is expected to close by June 30, 2016.
Meredith was founded in 1902 with the publication of Successful Farming magazine. In 1922, the company launched the publication of a home and family magazine that would eventually become Better Homes and Gardens.
Meredith has grown through acquisitions in recent years, picking up companies that would help it enter digital publication and and marketing. Meredith also owns 17 television stations. |
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