Delhi: Nexstar Broadcasting Group and Media General said on Thursday they had reached a $2.3 billion deal to create the second-largest U.S. broadcaster, in a deal that faces opposition from rival broadcaster Meredith Corp .


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U.S. broadcasters have been looking to consolidate to improve their ability to gain scale and attract local ad dollars and fees collected from cable companies, which pay local TV stations to carry their signals.


The announcement marks the end of a more than four-month effort by the Irving, Texas-based Nexstar, led by Chief Executive Perry Sook, to reach an agreement to buy Richmond, Virginia-based Media General, which had previously rebuffed its offers.
 
Before Media General can be bought by Nexstar, it needs to get out of its merger agreement to buy New York-based Meredith Corp for $2.34 billion.


Meredith, however, is not letting Media General out of its previously announced deal so easily. Meredith said on Thursday that its deal with Media General still stands and that it will go before a shareholder vote.


Meredith proposed some changes in its agreement with Media General, introducing a "merger of equals" that would give Media General shareholders $510 in cash, an annual dividend and proceeds from the upcoming broadcaster spectrum auction. It is asking Media General`s board to consider the new deal structure, which it says offers Media General`s shareholders $20 per share in value.


Media General said it made several proposals to Meredith to end their deal but that Meredith was unwilling to accept them. If shareholders vote against the Meredith acquisition, Media General can terminate its agreement.


To get rid of Meredith before the vote, Nexstar could pay Meredith a bigger breakup fee than the $60 million it is promised and could also sell Meredith some stations, according to people familiar with the matter. 


Nexstar owns 107 stations and Media General has 71 stations including NBC, CBS, ABC and Fox affiliates. 


Nexstar shares closed 7.1 percent lower at $52.84. Media General shares rose 2.3 percent to $16.12 and Meredith shares closed down 6.1 percent at $39.90 per share. 


Nexstar said it would pay $10.55 per share in cash and 0.1249 of a share of Nexstar stock for each Media General share, an equivalent of $17.66 per share. Nexstar said it agrees to sell TV stations necessary to receive regulatory approval and two Media General directors would join Nexstar`s board. Including debt, the deal is worth $4.6 billion