Shares of Meredith Corp.
MDP,
+5.85%
shot up 12.9% in premarket trading Monday, after the TV broadcasting and magazine advertising company announced a deal to sell its Local Media Group to Gray Television Inc.
GTN,
+12.76%
in a deal valued at $2.7 billion. Under terms of the deal, Meredith will spin off its National Media Group to shareholders, who will receive $14.50 per share in cash and a 1-for-1 equity share in the company after the deal closes. The stock closed Friday at $31.10, implying a $1.42 billion market capitalization for the company. Meredith's Local Media Group includes 17 TV stations in 12 local markets. Meredith said after the sale of the business, it will focus on accelerating growth on its People, Better Homes & Gardens and Allrecipes brands. "This transaction will allow us to sharpen our focus on the potential of our brands and assets," said Meredith Chief Executive Tom Harty. "We will invest to accelerate our digital growth and leverage our industry-leading first party data to deepen engagement with consumers across multiple platforms and provide advertising partners with greater value." Meredith's stock has run up 62.0% year to date through Friday, while Gray shares have advanced 13.6% and the S&P 500
SPX,
+0.37%
has gained 11.3%.