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Merger with Texas company raises issues for new owners

Media General Inc., a company based in Richmond, Virginia, has stated its intention to acquire LIN Media LLC, a company based in Austin, Texas. The combined operation is estimated to be worth as much as $2.6 billion, representing one of the largest television station ownerships in America. It would reach 26.5 million households through 74 television stations, covering 23 percent of homes in the country. The newly merged firm would also carry a substantially larger debt load and will restructure its upper management in order to move forward.

Shareholders for both companies are to vote on the matter on Aug. 20, and the measure must still gain the approval of federal regulators before it can go forward. The filing does acknowledge that the combined operation would be highly leveraged and concedes that this would be a risk factor that it will face. The two companies already have slightly under $1 billion in combined debt, and the acquisition is likely to entail further costs that will add to that debt. Media General has had success in the past seeking lower interest rates on its debts. The merger is expected to be completed sometime in the first half of 2015.

Even a friendly acquisition of a company within a firm's industry can entail a great deal of legal red tape, debt considerations and restructuring issues. Companies regularly turn to a business law attorney for guidance while going through the process.

An attorney may be able to provide advice about the most suitable legal path toward achieving a merger. It is also beneficial for a company to have legal counsel while handling negotiations with the business that's being acquired and also while trying to file required paperwork with local, state and federal regulators.

Source: Newsadvance.com, "Media General merger means bigger company, bigger debt", John Blackwell, August 17, 2014

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