Item 1.01 | Entry into a Material Definitive Agreement. |
Merger Agreement
On November 30, 2018, Nexstar Media Group, Inc., a Delaware corporation (“Nexstar”), and Titan Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Nexstar (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tribune Media Company, a Delaware corporation (“Tribune”), providing for the acquisition by Nexstar of all of the outstanding shares of Tribune Class A common stock, par value $0.001 per share (the “Tribune Class A Stock”) and Tribune Class B common stock, par value $0.001 per share (“Tribune Class B Stock”, and together with the Tribune Class A Stock, the “Tribune Stock”), by means of a merger of Merger Sub with and into Tribune (the “Merger”), with Tribune surviving the Merger as a wholly owned subsidiary of Nexstar (the “Surviving Corporation”).
Transaction Structure
In the Merger, each share of Tribune Stock outstanding as of the effective time of the Merger (the “Effective Time”) will be converted into the right to receive $46.50 in cash, without interest and less any required withholding taxes (such amount, as adjusted as provided below, the “Merger Consideration”). If the Merger shall not have occurred by August 31, 2019 (the “Adjustment Date”), the $46.50 cash amount per share of Tribune Stock to be paid will be increased for each day after the Adjustment Date, through and including the closing date, by adding an amount equal to $0.009863 per day after the Adjustment Date (approximately $0.30 per month,pro-rated for partial months), less the amount of any dividends declared by Tribune after August 31, 2019 with a record date prior to the Closing.
Each option to purchase shares of Tribune Stock outstanding as of immediately prior to the effective time of the Merger (a “Tribune Stock Option”), whether or not vested or exercisable, will be cancelled and converted into the right to receive a cash payment equal to the excess, if any, of the value of the Merger Consideration over the exercise price per share of such Tribune Stock Option, without any interest and subject to all applicable withholding. Any Tribune Stock Option that has an exercise price per share that is greater than or equal to the Merger Consideration will be cancelled for no consideration or payment.
Each award of Tribune restricted stock units outstanding as of immediately prior to the effective time of the Merger (“Tribune RSUs”), whether or not vested, will immediately vest and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Tribune Stock underlying such Tribune RSUs multiplied by the Merger Consideration, without any interest and subject to all applicable withholding (the “RSU Consideration”), except that each award of Tribune RSUs granted to an employee on or after December 1, 2018 (other than Tribune RSUs required to be granted pursuant to specified employment agreements or offer letters) (“Annual Tribune RSUs”) that has vested as of the effective time of the Merger will be cancelled and converted into the right to receive the RSU Consideration and any Annual Tribune RSUs that remain unvested as of the effective time of the Merger will be cancelled for no consideration or payment.
Each award of Tribune performance stock units outstanding as of immediately prior to the effective time of the Merger (“Tribune PSUs”), whether or not vested, will immediately vest (with performance conditions for each open performance period as of the closing date deemed achieved at the applicable “target” level performance for such Tribune PSUs) and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Tribune Stock underlying such Tribune PSUs multiplied by the Merger Consideration, without any interest and subject to all applicable withholding.
Each outstanding award of Tribune deferred stock units outstanding as of immediately prior to the Effective Time (“Tribune DSUs”) will be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Tribune Stock underlying such Tribune DSUs multiplied by the Merger Consideration, without interest and subject to all applicable withholding.
Each unexercised warrant to purchase shares of Tribune Stock outstanding as of immediately prior to the Effective Time (a “Tribune Warrant”) will be assumed by Nexstar and converted into a warrant exercisable for the Merger Consideration which the shares of Tribune Stock underlying such Tribune Warrant would have been entitled to receive upon consummation of the Merger and otherwise upon the same terms and conditions of such Tribune Warrant immediately prior to the effective time.