One of the nation’s largest financial institutions, home to veteran media industry analyst Jessica Reif Ehrlich, has reportedly teamed with other undisclosed banks in launching a leveraged loan to assist the nation’s largest single owner of broadcast television stations in its quest to acquire TEGNA.
Bank of America took the lead with the loan offer, presenting Nexstar Media Group with a $2.75 billion borrowing capacity to assist in the financing of its pending acquisition of the company formerly known as Gannett.
The loan was first reported on March 9 by Bloomberg, citing unnamed sources.
A Nexstar representative declined to comment when contacted by RBR+TVBR.
According to Bloomberg, the loan is being offered at a margin of as much as three percentage points ahead of benchmark and a discounted price of $0.99 on the dollar.
Commitments would be due March 18, Bloomberg said.
The Bloomberg report comes after a different unconfirmed report, courtesy of The Wall Street Journal, on March 6 claiming that a “coalition of states” including California, Colorado and New York intends to file an antitrust lawsuit that would prevent Nexstar from closing on its TEGNA acquisition following likely regulatory approval of the deal by both the FCC and the Justice Department.
What is confirmed is that one Nexstar shareholder has notified the Dallas-headquartered company founded by Chairman/CEO Perry Sook 30 years ago of its intent to solicit shareholders in support of five governance proposals at the company’s upcoming annual stockholder meeting.
The National Association of Broadcast Employees and Technicians (NABET) and Communications Workers of America (CWA), a longtime union representative for Nexstar’s workers, notified Nexstar of the plan to “undertake independent solicitation” of its stockholders “for governance reforms” on Monday (3/9).
Specifically, it calls for the adoption of governance proposals “to bring Nexstar in line with best practices” and “urges shareholders to take critical view of merger-driven strategy.”
In a statement, NABET-CWA President Charlie Braico pointed fingers at Nexstar’s board of directors for its perceived lack of independent leadership from Sook, “contributing to a record of governance problems that are harmful to shareholders. Despite strong shareholder support for an independent board chair, the company has delayed implementation of this policy as a condition of its employment agreement with Sook and the board has not even appointed a lead independent director. Now company leadership is engaged in empire-building through the proposed TEGNA transaction to the detriment of shareholders. These management problems extend to labor relations as well – Nexstar has repeatedly engaged in frivolous appeals, wasting resources rather than complying with administrative and court decisions requiring it to recognize its workers’ unions at multiple locations. By advancing an independent solicitation, we can ensure shareholders are afforded their right to a voice on the company’s governance shortcomings.”
Five proposals were offered by NABET-CWA:
- The Nexstar board is asked to adopt a “proxy access” bylaw provision that requires the company include shareholder-nominated candidates in Nexstar proxy materials for up to 20% of the board seats so long as the nominating stockholder (or group of up to 20 shareholders) has beneficially owned at least 3% of Nexstar’s outstanding shares continuously for at least three years.
- It is requested that the Board of Directors take the necessary steps to amend the company’s certificate of incorporation and bylaws as necessary to grant holders of at least 15% of outstanding common stock combined the power to call a special meeting of stockholders.
- The Board is asked to adopt a “poison pill” bylaw provision to require that any rights plan be submitted to a stockholder vote within one year of being adopted, extended, or renewed by the Board of Directors.
- The Board Chair shall be an independent director who hasn’t previously served as a Nexstar executive.
- The Board of Directors is urged to take the necessary steps to adopt a “major transactions stockholder approval” amendment to Nexstar’s certificate of incorporation that requires the company to obtain stockholder approval of any merger or acquisition prior to closing, when the value of that transaction exceeds 20% of the company’s market capitalization.
