Starboard Value Letter to Media General

Updated on

Starboard Value LP, together with its affiliates has been closely monitoring developments at Media General in connection with its evaluation of an unsolicited acquisition proposal from Nexstar Broadcasting Group, Inc. (“Nexstar”) to acquire Media General in relation to Media General’s currently pending acquisition of Meredith Corporation.

We were pleased to learn that on October 14, 2015, Media General entered into an agreement with Meredith that would allow for the mutual exchange of information between Media General and Nexstar. As you are aware, we continue to believe in the compelling strategic and economic benefits of a Media General-Nexstar combination. Nexstar management has a proven track record of execution, has a seasoned M&A track record, and has created substantial value for its shareholders over the past five years. In addition, we believe Nexstar’s estimated synergies of $75 million in year one could appear conservative to the total synergies of a deal, making any stock component of a transaction particularly attractive.

We are, however, both surprised and frustrated at Media General’s significant delay in determining that Nexstar’s acquisition proposal could reasonably lead to a superior offer, as would be required under the Meredith merger agreement for Media General to commence negotiations with Nexstar. It has been close to a month since Meredith granted the waiver allowing Media General and Nexstar to engage in mutual due diligence, and we cannot understand why it should take so long for Media General to declare that Nexstar’s acquisition proposal is reasonably likely to lead to a superior proposal. Importantly, reaching such a conclusion would not impair the current Meredith transaction and would merely allow Media General the flexibility to negotiate with Nexstar to see if it can reach a deal that provides superior value for its shareholders. Why would Media General not want to explore how much Nexstar may be willing to offer?

Our serious concern is exacerbated by media reports that Nexstar had previously made a private proposal in early August to acquire Media General in a transaction valued at $17.00 per share, but that management and the Board had refused to engage in discussions with Nexstar.

We want what is best for Media General shareholders. Unless and until Media General fully explores a potential transaction with Nexstar, we do not see how you could even consider asking shareholders to approve either the current Meredith transaction, or any revised Meredith proposal.

We continue to hope that no further action beyond this letter will be required. Any attempt by the Board to remove the ability of shareholders to vote on whatever transaction Media General chooses to support, however, would be viewed by us, and others as well, as a shareholder unfriendly form of disenfranchisement, and we would be prepared to take any and all action needed to ensure shareholder interests are protected. We hope to have a constructive engagement with you, and we are available to discuss the contents of this letter at your convenience.

We look forward to a successful outcome for the shareholders of Media General.


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