Acquisition Of Freedom Communications Supports Higher Valuation For Media General
By Amit Chokshi:In my last blog post on Media General (MEG), I discussed how the stock was undervalued on a sum of the parts basis, particularly given recent transactions in the broadcast television space. At the time, there was one significant comparable transaction whereby E.W. Scripps (SSP) paid $212MM to acquire McGraw-Hill’s (MHP) television division. However, Sinclair Broadcasting Group (SBG”) recently announced another deal in addition to its Four Points acquisition that should lend further support for a much higher valuation for MEG based solely on its broadcast television division. SBGI provided investors information on its pending $385MM acquisition of Freedom Communications' (“FC”) eight television stations on its Q3 conference call. FC’s television stations include five CBS affiliates, two ABC affiliates, and one CW affiliate. The stations operate in Florida, New York, Michigan, Oregon, Tennessee, and Texas. The key data point is that the $385MM purchase price translates into a sale multipleComplete Story »
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