Event Driven Takeaways
- Meredith is a strong candidate for Tribune/Sinclair divestitures, a company spokesperson tells Event Driven.
- Two former government attorneys say Meredith is big enough, but the company is seen as stronger in print media and will need to convince the DOJ that the Time Inc. deal will not impede assets purchased from Tribune/Sinclair.
- Meredith has a strong and recent track record as a buyer of divested assets outside of print media, the company spokesperson says.
Meredith Corporation is relatively well-positioned to purchase divested assets from the Tribune/Sinclair deal, according to a Meredith spokesperson and two former government attorneys specializing in the industry.
“Regarding why are we a good candidate, we believe we are an excellent operator of TV stations, and the markets and/or stations that may become available fit well with our acquisition criteria,” a spokesperson for Meredith told Event Driven.
As
reported by this publication in October, Meredith and Nexstar have long been rumored as potential divestiture buyers. Earlier this week, Meredith’s CFO confirmed at a conference hosted by UBS that “the Sinclair/Tribune portfolio is one we're looking at.” Another potential buyer is Tegna, which said in an earnings release on Nov. 8 that its strong balance sheet gives the company “the flexibility to invest opportunistically in both organic and inorganic growth.”
According to the first government attorney, Meredith “is definitely strong enough” to satisfy the DOJ. “The question is whether they have enough experience with the business to carry it at the same level as the sellers” given that Meredith has made its name primarily in print rather than broadcast media, the attorney said.
In return, the Meredith spokesperson said the company has been a “successful divestiture buyer in the past” and cited relevant transactions outside of print media. “Most recently we purchased stations in Phoenix and St. Louis as part of Tegna’s purchase of Belo, and the Fox affiliate in Mobile as part of Media General’s purchase of Lin,” the spokesperson said.
According to the second former government attorney, all three of the rumored bidders “are fairly sizeable.” In the DOJ’s eyes, “it’s much more attractive to have somebody who is a big, established player” in the business of the divested assets to be bought, said the attorney, who is familiar with the companies.
Meredith, which owns Family Circle, Better Homes and Gardens and AllRecipes, recently announced acquisition plans of its own. On Nov. 26, the media giant said that it would buy Time Inc. in a deal valued at $2.8 billion.
The DOJ may have questions about the Time deal in relation to Meredith’s role as the buyer of any Tribune/Sinclair assets. “If you want to do this other big transaction, how is this going to integrate with the other big transaction at the same time?” the second attorney said the DOJ would ask.
Neither Nexstar nor Tegna, both of which are media companies, responded to requests for comment.
Event Driven’s coverage of this deal can be found
HERE.
--Ryan Lynch and Matt Tracy