Gabelli Comments On Nexstar Agreement To Purchase Two TV CBS Affiliates

According to Gabelli, Nexstar Broadcasting Group NXST announced an agreement to purchase two TV CBS affiliates – WFVR, Green Bay and WJMN, Marquette from Liberty Media for $20 mm ($17.5 mm cash, $2.5 mm in NXST stock). Gabelli reported that it thinks both transactions are positives for Nexstar with the acquisitions accretive to EBITDA, free cash flow and value. “While the purchase was opportunistic, we continue to believe that more M&A activity in the broadcast space will follow. At a minimum, the Freedom stations are still on the market and do not believe that the former Young stations that are now owned by creditors will remain under the current ownership forever. Shares are trading at about 7.8x 2011PF BCF and 6.0x 2012PF. We calculate a 2012/2013 PMV of about $14-15 through the next political cycle.” Nexstar Broadcasting Group closed yesterday at $8.99.