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New ZYork • Nexstar Broadcasting Group Inc., pursuing Media General Inc. in a takeover since September, said its target rejected a sweetened $2.1 billion bid, signaling that the saga of who will merge with the TV-station owner isn't over yet.
Nexstar, whose latest cash-and-stock offer is valued at $16.31 a share based on Media General's Dec. 8 closing price, said in a statement that the company made an "unreasonable" counter-proposal for $18.61. While the rejection leaves the door open for Media General to pursue its own plan to buy Meredith Corp., another TV-station owner, Nexstar's bidding may not be over, Wells Fargo analyst Marci Ryvicker said in a note to clients.
"Our sense is the two shake out somewhere in between the $16.30 and $18.60 options," Ryvicker wrote, "at which point Meredith might somehow try to squeeze its way in."
Media General's stock, which trades about 11 percent lower than Nexstar's bid, suggests that investors don't anticipate a higher offer. Media General didn't return calls seeking comments, and Meredith spokesman Art Slusark declined to comment.
Nexstar made a move on a company that's bigger than itself to try to break the broadcaster's agreement to acquire Meredith. A combination with Media General would own 162 TV stations and reach 39 percent of U.S. TV households, according to Nexstar. Local broadcasters have seen a lot of consolidation in recent years. They seek to get bigger to gain bargaining power with pay-TV providers like AT&T Inc. and Comcast Corp. and be able to charge higher rates, known as retransmission fees, for the right to carry their stations.
"Our current proposal is at the limits of reasonable multiples." Nexstar Chief Executive Officer Perry Sook said in the statement.
Nexstar fell 4.7 percent to $53.71 at 2:41 p.m. in New York. Media General dropped 0.8 percent to $14.46, while Meredith gained 1 percent at $46.09.
Nexstar, Media General and Meredith specialize in operating local affiliates of broadcast networks including 21st Century Fox Inc., CBS Corp., Comcast's NBC and Walt Disney Co.'s ABC.
In 2013, Gannett Co. agreed to buy Belo Corp. for about $1.5 billion, while Media General itself bought New Young Broadcasting Holding. In September, Media General agreed to buy Meredith in a cash and stock deal valued at about $2.4 billion.
The new company would have been led by Meredith's Chief Executive Steve Lacy and called Meredith Media General.