Media General to buy LIN Media for $1.6 billion
By Sruthi Ramakrishnan
(Reuters) - Media General Inc said on Friday it would buy LIN Media LLC for $1.6 billion to create the second largest local TV broadcast company in the United States.
The deal, putting the combined company in reach of about 23 percent of U.S. TV households, is the latest in a frenzy of transactions involving local broadcast television.
The lure is TV stations' ability to attract local ad dollars and fees collected from cable companies, which pay local TV stations to carry their signal.
Gannett Co, Tribune Co and Sinclair Broadcast Group have all made big TV acquisitions in the last 10 months.
Tribune became the largest local TV broadcaster after it bought Local TV Holdings for $2.73 billion last June. Gannett snapped up Belo Corp for $1.5 billion and Sinclair Broadcast Group Inc agreed to acquire eight TV stations from the Allbritton family for $985 million.
As part of the Media General deal, LIN shareholders will get $27.82 per share in stock and cash, based on Media General's trailing 20-day average price. At that price, the offer represents a premium of 29.5 percent to Lin's Thursday closing.
Including LIN's debt of $968 million the deal is valued at approximately $2.6 billion
Shares of Media General, in which Warren Buffett's Berkshire Hathaway Inc held a stake of about 5 percent as of December, jumped 12.5 percent to $19.51 in early trading. Continued...