Acquisition of LIN Media LLC by Media General, Inc. May Not Be in LIN Media Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of LIN Media LLC (NYSE: LIN) by Media General, Inc. (NYSE: MEG). On March 21, 2014, the companies announced the signing of a definitive merger agreement pursuant to which LIN Media shareholders will receive, $27.82 in cash or 1.5762 shares of the new holding company for each share of LIN Media stock. Based on Media General’s closing price of $17.34 on March 20, 2014, LIN Media shareholders will receive $27.33 in stock if that consideration type is chosen.
Is the Proposed Merger Best for LIN Media and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at LIN Media is undertaking a fair process to obtain maximum value and adequately compensate LIN Media shareholders.
As an initial matter, the $27.82 merger consideration represents a premium to shareholders of 29.5% based on LIN Media’s closing price on March 20, 2014. This one day premium is significantly below the median one day premium of over 90.48% for comparable transactions in the last three years. Further, prior to the announcement of the merger, an analyst at Wedbush Securities, Inc. set a target price of $32.00 on February 7, 2014. Moreover, LIN Media has traded above the offer price as recently as January 9, 2014, reaching a high of $29.24.
In addition, on February 6, 2014, LIN Media released its financial results for the fourth quarter and full year 2013, reporting strong increases in net revenues, local revenues, and interactive revenues. Specifically, LIN Media reported annual revenues of $652.4 million, an 18% increase compared to 2012. In addition, the company reported a 35% increase in local revenues and an 85% increase in interactive revenues. LIN Media also reported that the company’s core local and national time sales increased 9% in the fourth quarter and 24% for the full year, compared to 2012, while it expanded local news at 11 television stations.
In announcing the company’s result, LIN Media’s President, and Chief Executive Officer, Vincent L. Sadusky, stated, “Significant growth of our digital media business and pay TV subscriber fees helped offset comparisons to the prior year when we earned record political revenues. Excluding political revenues, we increased net revenues by 20% in the fourth quarter and 35% for the full year. Looking ahead, we are confident in the evolution of our company and our ability to capitalize on our recent acquisitions.”
Given these facts, Robbins LLP is examining the LIN Media board of directors’ decision to sell the company to Media General now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
LIN Media shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
LIN Media shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.