Nexstar in talks to buy Media General for about $17.50 a share

Nexstar Broadcasting Group is in talks to buy Media General for around $17.50 per share in a more than $2 billion deal that would create the second-largest U.S. local television broadcaster, according to two sources familiar with the situation.

Timing of the deal is uncertain, and an agreement could still fall through, the sources said, asking not to be named because the matter is confidential.

Representatives from Nexstar and Media General declined to comment.

Media General's shares rose as much as 4.7 percent after the news and closed up 49 cents, or 3.16 percent, at $15.99. Nexstar gained $2.48, or 4.43 percent, to close at $58.50.

The acquisition, if completed, would mark the end of a more than four-month effort by the Irving, Texas-based broadcaster led by chief executive Perry Sook to buy Richmond, Virginia-based Media General. A deal would end a bid by Media General to buy New York-based Meredith Corp for $2.34 billion.

In Las Vegas, Channel 8 is owned by Nexstar, and Channel 5 is owned by Meredith.

U.S. broadcasters have been looking to consolidate in recent years to improve their ability to attract local ad dollars and fees collected from cable companies, which pay local TV stations to carry their signals.

In September, Nexstar made an unsolicited bid of $14.50 per share to buy rival Media General, weeks after Media General had announced a deal to acquire Meredith Corp. Media General rejected a sweetened takeover from Nexstar earlier this month.

Meredith will have a chance to respond to Nexstar's offer and has spoken to Media General about its options, according to a separate source familiar with the matter.

If Media General's board decides to recommend a deal with Nexstar, Meredith will have four business days to respond with an offer of its own for Media General.

A representative for Meredith declined to comment. Activist investor Starboard Value LP disclosed 4.5 percent stake in Media General Inc. in September and urged the company to sell itself to Nexstar and scrap its plan to buy Meredith. It said in November it was frustrated that Media General was taking too much time to make a decision on whether a deal with Nexstar was superior.

Starboard has said it was prepared to nominate an alternative slate of directors to Media General's board. The monthlong window to nominate a slate of directors to Media General's boards starts on Dec. 26.

The New York Post first reported on Wednesday that Nexstar and Media General were nearing a deal.