NEW YORK (TheStreet) -- LIN Media (LIN) is surging on the news Media General (MEG - Get Report) will purchase the company to become the second-largest pure-play television broadcasting company in the U.S.
By midday, shares had spiked 22.8% to $26.39. Trading volume of 4.8 million was more than 9 times its three-month daily average.
The combined company will include 74 network-affiliated owned or serviced TV stations in 46 markets with reach of 26.5 million, or around 23% of the total number of TV households in the U.S.
Under the agreement, LIN Media will receive $763 million in cash as well as 49.5 million shares. The total transaction will equate to approximately $27.82 per LIN share, representing a 30% premium on Thursday's close of $21.49.
After the merger's close, LIN shareholders will hold around 36% of the newly-formed company while Media General will hold around 64%.
LIN's current president and CEO Vincent Sadusky will become president and CEO of the combined company named Media General.
"The merger of two highly respected broadcasters with superior television and digital assets creates maximum value for shareholders and provides us the scale, breadth and resources to compete more effectively in the rapidly evolving media landscape," said Sadusky in a statement.