Media General Sets Accord To Acquire Park Acquisitions
April 04, 2011
Media General Inc. has definitively agreed to acquire Park Acquisitions Inc., parent of Park Communications Inc., for $710 million. The acquisition will include 10 television stations, 29 daily newspapers and 82 weekly newspapers. The deal is expected to be completed by September 13, 2011 pending regulatory approval. The acquisition continues Media General's effort to grow through acquisitions and focus on markets in the Southeast. Media General, based in Richmond, Va., said the 10 television stations acquired will more than double its U.S. broadcast coverage to 5.4% of homes with television, and will increase its reach in the Southeast to 22.1% of homes with television, compared with 9.2% currently reached. ``Shareholders have been frustrated for some time at the company's lack of acquisitions,'' said Kenyatta Nathan, an analyst at Wheat First Butcher Singer. ``This gives them growth, and it's a perfect fit with their focus on the Southeast.'' The television stations being purchased are in markets ranging from Birmingham, Ala., the 51st-largest market, to Alexandaria, La., the 177th-largest market. Of the Park stations, five are CBS affiliates, three are ABC affiliates, and two are NBC affiliates. Closely held Park Acquisitions, based in Lexington, Ky., projected 2011 revenue of about $160 million. Media General said the acquisition will contribute to operating cash flow immediately. Media General reported revenue of $707.8 million in 2010. Media General plans to trade WTVR-TV, the Park-owned station in Richmond, Va., for other broadcast properties since Federal Communications Commission regulations prohibit ownership of both a newspaper and a television station in the same city. It already owns the Richmond Times-Dispatch. Most of Park's 28 daily newspapers are located in the Southeast, including eight newspapers in North Carolina. In composite trading Monday on the American Stock Exchange, Media General shares closed at $33.75, down $1.625.
