June 3rd, 2016 (Irving, Texas) – Today, Nexstar Broadcasting Group Inc. (NASDAQ: NXST) announced their intention to divest two of their stations. Nexstar and Media General (NYSE: MEG) confirmed they had entered into a definitive agreement to sell the WBAY-TV and KWQC-TV stations to Gray Television Group (NYSE: GTN). The transaction will net the company $270 million. Of course, the true motivate for the divesture isn’t monetary value.
In January of this year, Nexstar and Media General entered into a merger agreement, which will see Nexstar obtain all outstanding shares of Media General. The planned sale of the assets is an attempt by Nexstar to show their willingness to abide by FCC local and national ownership rules. The company hopes the decision to sell the two networks will help them obtain the approval from the FCC and DOJ for their proposed merger.
Nexstar Broadcasting Group is one of the biggest and most diversified media companies in the country. The group delivers their content to consumers through traditional media, mobile platforms and digital platforms. Nexstar is capable of reaching approximately 18% of all United States households with televisions. Media General covers approximately 23% of all households within the United States. The combination of both could potentially push Nexstar over the 39% limit, which is likely the key motivate for the divestment.
During the day’s trading, Nexstar fell .72% to close at $52.50. The company’s 52-week range stretches from $34.65 to $61.79. In other news, The Noble Financial reaffirmed their “Buy” rating for the stock approximately two weeks ago. They also set a $75.00 price target for the stock, which is up $12 from their previous target of $63.00.
During the first quarter of the year, Legal & General Group Plc increased their position in the company by 25.5%. After purchasing an extra 1,615 shares of the stock, the firm reported owning 7,937 shares in total. During the same time period, JPMorgan Chase & Co. increased their stake in the company by 469.5%. They now own 842,129 shares of Nexstar’s stock.