Gray Television (GTN) increases bid for Meredith (MDP) Local Media Group to $ 16.99 / share following unsolicited bid
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Gray Television, Inc. (NYSE: GTN) today confirmed that Meredith Corporation (NYSE: MDP) recently informed Gray that after announcing the definitive deal with Gray, it had received an unsolicited offer to acquire its division. Local Media Group, including all TV stations broadcast by Meredith, from another party. Gray then proposed to amend the parties’ merger agreement to increase the total consideration payable by Gray to approximately $ 14.50 per share in cash, or $ 2.7 billion in total enterprise value (after the split from Meredith’s National Media Group to current Meredith shareholders), at $ 16.99 per share in cash, or $ 2.825 billion in total enterprise value; increase certain fees owed to the other party in connection with certain termination events under the merger agreement; and make certain other revisions. On June 2, 2021, Gray and Meredith entered into an amendment to reflect the revised terms.
Meredith informed Gray that her board unanimously approved Gray’s revised proposal, citing higher value certainty, regulatory considerations, the way forward for the close and the expected timeline.
Gray remains committed to moving forward with its ongoing acquisition of local Meredith TV stations. Gray continues to believe that the proposed Gray / Meredith transaction is in the best interests of the shareholders of Gray and Meredith, as well as the respective employees of the companies, business partners and local communities.
Meredith’s board of directors continues to recommend that its shareholders approve the proposed transaction with Gray. In addition, Meredith’s controlling voting shareholders of approximately 87% of the issued and outstanding Class B common shares of Meredith have entered into a Voting and Support Agreement which generally requires such shareholders to vote for their shares. in favor of the adoption of the Merger Agreement and take certain other steps to support transactions contemplated by the Merger Agreement (including voting against any competing proposals) until the Merger Agreement has been terminated.
Gray continues to expect Meredith’s transaction, even as amended, to be significantly accretive to free cash flow per share. To date, Gray has identified approximately $ 55 million in annualized synergies for the first full calendar year following closing. Including these $ 55 million of anticipated synergies, the revised purchase price of the Meredith acquisition by Gray represents a multiple of approximately 8.3 times the weighted average 2019/2020 resorts operating cash flow. television station Meredith.
The transaction is subject to Meredith shareholder approval and customary closing conditions and regulatory approvals, including certain consents required to effect the National Media Group spin-off from Meredith immediately prior to the closing of Gray’s acquisition of Meredith. . A strong generation of free cash flow expected from the close of all pending transactions and throughout 2021 and 2022 should allow Gray to deleverage its capital structure after the close. Assuming a close at the end of 2021, Gray expects its total leverage ratio, net of all cash, to be approximately 5.4 times over the last eight quarters of operating cash flow, including annualized synergies. estimates of all announced transactions.