NBC will support bid for Ion

NBC Universal Inc. is supporting a bid by Citadel Investment Group to buy control of television station owner Ion Media Networks Inc. that values the company at about $1.4 billion including preferred stock.

The proposal would pay investors in West Palm Beach, Fla.-based Ion, formerly Paxson Communications Corp., $1.41 a share, more than double the stock’s closing price of 62 cents Wednesday, according to a regulatory filing by NBC and Citadel. Citadel, a Chicago-based private equity firm, plans to take Ion private.

The transaction would give Citadel control of about 60 television stations that reach more than 90 million U.S. households, with NBC Universal as a minority shareholder.

Ion’s i network needs better shows, said Harold Vogel, an independent media analyst in New York.

“They do have potential but they have to get the programming,” Vogel said. “They have the framework but they can’t put meat on the bones because they don’t have the money.”

Under the proposal, NBC would transfer its right, acquired in November 2005, to buy Ion stock, to Citadel. Citadel would then tender an offer to acquire the shares. Preferred stockholders would have the option of exchanging their shares for debt at a discounted rate. The transaction requires approval by Ion’s board and the Federal Communications Commission.

Ion Chief Executive Brandon Burgess said he expected Citadel to provide cash the company needed to improve programming and add more digital channels.