Media General to merge with Young Broadcasting

Shares of Media General Inc. jumped as much as 29% Thursday morning after the company announced it will merge with privately held Young Broadcasting in an all-stock deal.

The combined company will own or operate 30 TV stations in 27 markets, extending its reach to 14% of U.S. households, and will retain the name Media General and its Richmond, Va., headquarters.

Following the close of the transaction, shareholders of Nashville-based Young will own 67.5% of the shares, while Media General shareholders will own 32.5%.

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Warren Buffett’s Berkshire Hathaway Inc. last year bought most of Media General’s newspapers, leaving the company to focus on its network-affiliated broadcast stations, of which it currently has 18.

Media General’s outstanding debt was $601 million as of March 31 and New Young’s was $164 million. The new company plans to pursue a debt refinancing of about $900 million.

The new company, which will continue to trade on the New York Stock Exchange under the symbol MEG, will be majority-owned by New Young shareholders.

The transaction, which has been approved by the boards of both companies and New Young’s shareholders, is expected to close in the third or fourth quarter this year.

The merger is subject to the approval by shareholders of Media General and regulators.

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Twitter: @rfaughnder