Media General to acquire Meredith Corp. for $2.4 billion

Richmond-based Media General Inc. announced Tuesday it will acquire Des Moines-based Meredith Corp. for $2.4 billion, creating the third-largest local television station owner in the country.

Media General has created a new holding company, which after closing will be named Meredith Media General.

The company will maintain corporate and executive offices in Richmond and Des Moines but will be incorporated in Virginia.

J. Stewart Bryan III, the current chairman of Media General, will be chairman of Meredith Media General. The 12-member board of directors will include eight Media General-appointed directors and four Meredith-appointed directors.

Stephen M. Lacy, chairman and CEO of Meredith Corp., will become CEO and president of the new holding company. Joseph H. Ceryanec, current vice president and CFO of Meredith, will become chief financial officer.  The remainder of senior management will be a combination of Meredith and Media General executives.

The combined company is expected to have annual revenues of $3 billion and initially own 88 televisions in 54 markets that will reach 30 percent of television households in the U.S. The company will be required to swap or stations in six markets to address regulatory considerations. Meredith also owns brands including Better Homes and Gardens, Allrecipes, Parents and Shape.

The transaction has been approved by both boards of directors of Media General and Meredith. It is subject to approval by shareholders of both companies and the Federal Communications Commission. The transaction is expected to close by June 30.

Media General shareholders will receive one share of the new holding company for each share of Media General that they own. 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. After closing, Media General shareholders will own 65 percent and Meredith shareholders will own about 35 percent of Meredith Media General’s fully diluted shares.

Under terms of the agreement, Meredith shareholders will receive cash and stock valued at $51.53 per share, 12 percent above Meredith’s closing price on Sept. 4.