Meredith Corp. is looking to sweeten the pot to complete a $2.4 billion merger with Media General and thwart a rival offer from Nexstar Broadcasting Group, The Post has learned.
Although it is technically getting acquired, Meredith, under Chief Executive Steve Lacy, is considering a role reversal, whereby it would kick in cash to win the support of Media General’s board, sources said.
“A new deal needs stock value and cash to go the other way,” said a source familiar with the board’s thinking.
Meredith, which owns broadcast stations and magazines, is expected to offer a revised deal in the next few weeks, sources said.
Under the current deal, Media General is the de facto buyer after agreeing in September to pay $2.4 billion in cash and stock for Meredith. But then Nexstar offered to buy Media General for $1.9 billion, putting itself in the way of the anticipated merger.
Media General on Nov. 16 said it was opening merger talks with Nexstar. It insisted that, while the board continues to back the deal with Meredith, it has a financial duty to respond to the Nexstar offer.
The tug-of-war over Media General comes as local TV stations seek to increase their leverage in negotiations with cable and satellite providers over so-called “retransmission fees.”
When broadcasters merge, the buyer can apply its higher retransmission fees to the acquired stations — instantly boosting profits.
Media General charges higher retrans rates than Meredith. A combination would allow the merged company to add roughly $30 million in such fees.
A deal can be structured in which Media General is the acquirer but Meredith provides cash to Media General shareholders.
One possibility is for Meredith to offer a special dividend to Media General just prior to the merger closing that would be contingent on the deal’s completion.
Meredith did not return calls. Media General declined comment.