Shareholders of Media General Inc. are expected to approve the Richmond, Va.-based company’s merger with Nashville, Tenn.-based New Young Broadcasting Holding Co. Inc. The merger would “transform Media General’s ownership structure, marking the first time that J. Steward Bryan III and his family won’t control the company,”
the
Richmond Times-Dispatch
reported.
The
Times-Dispatch
was owned by Media General until June 2012.
After the merger, Media General would own 31 TV stations in markets nationwide. Currently, it owns and operates 18 stations, mostly in the Southeast, the article said.
The
Times-Dispatch
report said that under the merger agreement, all outstanding shares of Class A and Class B Media General stock would be reclassified as shares of a new class of voting common stock. Media General stockholders and other equity holders would own about 32.5% of the combined company; New Young Broadcasting investors would own about 67.5%
“The merger eliminates the dual-class stock structure that has given Bryan, the company’s chairman and former CEO, voting power to elect 70 percent of [Media General’s] board of directors,” the article said. Bryan’s great-grandfather founded the company that became Media General. Bryan would be chairman of the combined company, which initially would have a 14-member board, the report noted. The board will shrink to 11 members after the combined company’s 2014 annual stockholder meeting.
“Bryan has said it was no longer necessary to maintain a dual-class stock structure after the company exited the newspaper business,” the
Times-Dispatch
article said. The company sold 63 publications to a subsidiary of Berkshire Hathaway Inc. in June 2012 and sold the
Tampa Tribune
to a different buyer in October 2012. Berkshire Hathaway, which currently owns about 17% of Media General’s Class A stock, would own 4.99% of the combined company’s voting shares after the merger, the
Times-Dispatch
reported.
The
Times-Dispatch
report said that early in the merger discussions with New Young Broadcasting, Bryan had requested that the Class B shares receive a 20% to 30% premium in exchange for relinquishing the right to elect a majority of the board. He withdrew that request as merger talks progressed, the article said. He also withdrew a request that he receive a consulting agreement with the merged company, the report noted. (Source:
Richmond Times-Dispatch,
Nov. 4, 2013.)
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