Media General plans $1.6 billion of debt for merger with LIN Media

By Sara Rosenberg

New York, March 21 - Media General Inc. has received a commitment for $1.6 billion of debt financing from RBC Capital Markets to support its merger with LIN Media LLC, according to a news release.

The debt commitment will cover the $763 million cash payment to LIN shareholders, refinance certain LIN debt and transaction fees and expenses.

At closing, pro forma net leverage is expected to be less than 5.0 times, based on 2013/2014 average year pro forma adjusted EBITDA.

Under the agreement, shareholders of LIN Media will receive aggregate consideration valued at $1.6 billion through stock and the $763 million cash payment, or about $27.82 per share. Based on LIN Media's pro forma net debt balance of $968 million at Dec. 31, 2013, the transaction enterprise value is around $2.6 billion.

There is a "window-shop" period through April 25, during which LIN Media may provide information to third parties who submit an acquisition inquiry.

Closing is expected in early 2015, subject to Media General and LIN shareholder approval, FCC approval, HSR clearance and other customary conditions.

Media General is a Richmond, Va.-based local television broadcasting and digital media company. LIN Media is an Austin, Texas-based local multimedia company.

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