(Reuters) - Nexstar Broadcasting Group (NXST.O) is in talks to buy Media General MEG.N for around $17.50 per share in a more than $2 billion deal that would create the second largest U.S. local television broadcaster, according to two sources familiar with the situation.
Timing of the deal is uncertain and an agreement could still fall through, the sources said, asking not to be named because the matter is confidential.
Representatives from Nexstar and Media General declined to comment.
Media General's shares rose as much as 4.7 percent after the news and last traded up 50 cents or 2.6 percent at $15.91.
The acquisition, if completed, would mark the end of a more than four-month effort by the Irving, Texas-based broadcaster led by chief executive Perry Sook to buy Richmond, Virginia-based Media General. A deal would also end a bid by Media General to buy New York-based Meredith Corp (MDP.N) for $2.34 billion.
U.S. broadcasters have been looking to consolidate in recent years to improve their ability to attract local ad dollars and lucrative fees collected from cable companies, which pay local TV stations to carry their signals.
In September, Nexstar made an unsolicited bid of $14.50 per share, a deal valued at $4.1 billion, to buy rival Media General, just weeks after Media General had announced a deal to acquire Meredith Corp. Media General rejected a sweetened takeover from Nexstar earlier this month.
Meredith will have a chance to respond to Nexstar's offer and has already spoken to Media General about its options, according to a separate source familiar with the matter.
If Media General's board decides to recommend a deal with Nexstar, Meredith will have four business days to respond with an offer of its own for Media General.
A representative for Meredith declined to comment.
Activist investor Starboard Value LP disclosed 4.5 percent stake in Media General Inc in September and urged the company to sell itself to Nexstar and scrap its plan to buy Meredith. It said in November it was frustrated that Media General was taking too much time to make a decision on whether a deal with Nexstar was superior.
Starboard has previously said was prepared to nominate an alternative slate of directors to Media General's board. The month-long window to nominate a slate of directors to Media General's boards begins on December 26.
The New York Post first reported on Wednesday that Nexstar and Media General were nearing a deal.
Reporting by Jessica Toonkel and Liana B. Baker in New York; Editing by Chizu Nomiyama, James Dalgleish and Andrew Hay