Nov 20 Broadcaster Gray Television Inc and Excalibur Broadcasting LLC said they would buy 20 stations from Hoak Media LLC and Parker Broadcasting Inc for $335 million in cash, sending Gray's shares up as much as 19 percent.
Gray, which has been expanding across the United States this year, said the deal would add to its portfolio of stations in the central United States.
Gray will acquire 16 ABC, CBS, NBC and Fox affiliates and satellite stations in South Dakota, North Dakota, Colorado, Nebraska, Louisiana and Florida.
Excalibur, owned by Gray's former regional vice-president, Don Ray, will buy four stations in Nebraska, North Dakota, Louisiana and Colorado.
The companies will sell some of the stations they are acquiring in Grand Junction, Colorado and Panama City markets to meet regulatory requirements.
Excalibur will also buy two Fox-affiliated stations in North Dakota from Prime Cities Broadcasting Inc for $7.5 million.
Gray has signed agreements to provide back-office services and limited programming to Excalibur.
As advertising revenues and audience numbers decline, broadcasters are renewing their appetite for TV stations, which have multi-revenue streams including from cable operators, who pay retransmission fees to the stations to carry the channel.
Gannett Co Inc, the biggest U.S. newspaper publisher, bought television company Belo Corp for $1.5 billion in June, while Tribune Co said in July it would buy 19 television stations from Local TV Holdings LLC for $2.73 billion.
Wells Fargo analyst Marci Ryvicker called Gray's deal with Hoak a positive surprise that could be "potentially transformative" for Gray.
Gray expects the transactions to immediately add to its free cash flow.
The deals are expected to close in the first or second quarters of 2014.
Gray's shares were up 15 percent at $10.84 in afternoon trading on Wednesday.