Meredith Corp. MDP 5.18% is selling its broadcast-television business to Gray Television Inc., GTN 5.15% in a deal the company said would allow it to better focus on its magazine brands and digital-media properties.
Meredith on Monday said Gray agreed to purchase its business that owns or operates 17 television stations for $2.7 billion in cash. The stations reach 11% of U.S. households, including in markets such as Atlanta, Phoenix and St. Louis.
Shares of Meredith jumped 7.4% shortly after the opening bell.
Des Moines, Iowa-based Meredith has been remaking its media portfolio over the past several years. In 2018, it announced deals to sell magazines such as Time and Fortune, and more recently agreed to sell Travel + Leisure amid financial pressure in the magazine industry.
When the latest deal is complete, Meredith said it would work to expand brands such as People, Better Homes & Gardens and Allrecipes.
“The more focused company will continue producing and delivering content for 95% of U.S. women, many of whom are primary decision makers for the household,” Meredith said.
Gray Television said the deal would make it the second-largest television broadcaster in the country, serving 113 markets and reaching 36% of households. Gray said it plans on selling a station covering Flint and Saginaw, Mich., where Meredith also has a station.
Meredith said the deal is structured as a spinoff of its national-media business into a stand-alone public company that would retain the Meredith Corp. name and headquarters in Des Moines. The company would continue to be led by its existing senior management team, including Chief Executive Tom Harty.
The deal is expected to advance Meredith’s objectives of reducing net debt, investing in digital and consumer projects and providing shareholder returns, Mr. Harty said. It is expected to be completed in the fourth quarter of this year, Meredith said.
Write to Micah Maidenberg at [email protected]
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