The revised accord lowers the stock portion of the original $1.6 billion purchase price, the companies said today in the statement. The cash amount will stay the same.
Media General revised the deal after New York-based CBS Corp. (CBS:US) terminated its affilation with Lin’s WISH-TV in Indianapolis last week. The network switched to Tribune Media Co.’s WTTV-TV after negotiating a better deal. CBS has been pressing affiliate stations for a larger share of the money they receive from pay TV operators.
“We’re very pleased that Tribune recognized the full value that CBS brings to their business and brands across all of their stations included in this deal,” Ray Hopkins, president of TV network distribution at CBS, said last week when announcing the affiliate switch.
The lower price reflects the loss of the Indianapolis affiliation, Vincent Sadusky, president and chief executive officer of Austin, Texas-based Lin, said on a call today.
“Today’s amendment to the merger agreement is a technical recalibration in light of the change in affiliation status of WISH-TV,” Sadusky said.
Media General, based in Richmond, Virginia, rose 7 percent to $18.44 today in New York. Shares of the company, backed by Warren Buffett and Mario Gabelli, have declined 18 percent this year. Lin rose 2.7 percent to $24.03. The stock fell 13 percent over three days (LIN:US) last week after CBS announced the new deal in Indianapolis.
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