NEW YORK (TheStreet) -- Shares of Nexstar Broadcasting (NXST - Get Report) are up by 2.02% to $45.42 at the start of trading on Monday morning, after the media company offered to buy rival Media General (MEG) for about $4.1 billion including debt.
Nexstar is offering $10.50 per share in cash and .0898 shares for each Media General share, or approximately $14.50 per share.
The price of $14.50 a share represents a 30% premium from Media General's closing price on Friday.
Earlier this month, Media General agreed to purchase rival Meridith Corp (MDP - Get Report) for $2.34 billion in a merger that would create the industry's third largest regional television station operator.
However, Nexstar believes that it has the superior tie-up offer.
"It is illogical that Media General's Board has refused to engage with us and has instead pursued an ill-conceived and value-destructive acquisition of Meredith that would once again expose Media General shareholders to the risks of the low-margin publishing business," said Nexstar CEO Perry Sook.
Media General shares are up 24.2% to $13.85 in early market trading.
Separately, TheStreet Ratings team rates NEXSTAR BROADCASTING GROUP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate NEXSTAR BROADCASTING GROUP (NXST) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NXST's very impressive revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues leaped by 50.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- NEXSTAR BROADCASTING GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NEXSTAR BROADCASTING GROUP turned its bottom line around by earning $2.01 versus -$0.08 in the prior year. This year, the market expects an improvement in earnings ($2.61 versus $2.01).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 85.7% when compared to the same quarter one year prior, rising from $10.94 million to $20.32 million.
- Net operating cash flow has slightly increased to $30.97 million or 7.94% when compared to the same quarter last year. In addition, NEXSTAR BROADCASTING GROUP has also modestly surpassed the industry average cash flow growth rate of 7.42%.
- You can view the full analysis from the report here: NXST