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Nexstar Media Group has offered to buy Tribune Media Co. for $4.1 billion, a cash deal that will make Nexstar the biggest owner of local television stations in the United States.
Of course, the proposed acquisition must be approved by regulators who chased off Tribune's last suitor. The company withdrew from merging with Sinclair Broadcast Group in August after the Federal Communications Commission put too much regulatory pressure on the businesses.
It may work out better for Tribune in the end, however. In the three months since the Sinclair deal fell apart, the company got a Nexstar offer worth about $200 million more.
Sinclair Down, Nexstar Up
The Nexstar deal is valued at $6.4, which includes Tribune's debt. Nexstar, which already broadcasts in 39 percent of the U.S., will acquire stations in eight of the nation's 10 largest markets, including New York, Los Angeles, and Chicago.
Tribune owns 42 stations that reach 50 million households, plus the WGN cable network and 31 percent of the Food Network. To overcome regulatory hurdles, Nexstar plans to divest or trade stations in 15 markets where Tribune has properties.
In the previous deal, Sinclair had agreed to divest about two dozen stations. FCC Chairman Ajit Pai, however, said he had "serious concerns" about it.
Tribune then terminated the Sinclair deal and sued the company for dragging its feet through the regulatory process. "Unfortunately, Sinclair chose to follow a regulatory strategy reflecting its own self-interest, rather than its contractual obligations," said Tribune CEO Peter Kern.
Under the Nexstar/Tribune agreement, Nexstar will pay $46.50 per Tribune share. The announcement bumped Tribune stock up nearly 10 percent; Nexstar shares almost 3 percent.
If approved by regulators, the deal is expected to close in the second half of 2019.