Deal For Tegna Announced, Cox To Absorb 5 Stations

UPDATE 10:15 AM:  Local TV station giant Tegna is being acquired by a Standard General L.P. affiliate for $24 per share in cash. The deal has an equity value of approximately $5.4 billion and an enterprise value of about $8.6 billion when including the assumption of debt.

The Wrap reports the transaction represents a premium of roughly 39% to Tegna’s unaffected closing share price on Sept. 14, 2021, which was the last full trading day prior to media speculation about a potential sale. It represents a premium of approximately 11% to Tegna’s all-time high closing price since separating from the Gannett publishing business in 2015.

The transaction was unanimously approved by the Tegna Board. It is now subject to approval by Tegna shareholders, regulatory approvals, and other customary closing conditions, and is expected to close in the second half of 2022.

Following the close of the transaction, Tegna stations in Austin (KVUE), Dallas (WFAA and KMPX) and Houston (KHOU and KTBU), are expected to be acquired by Cox Media Group from Standard General. Tegna will become a private company when the deal is done.

Standard General L.P. is a New York-based investment firm founded in 2007 by Soohyung “Soo” Kim and Nicholas Singer, with seed capital from Reservoir Capital Group. Kim, who has been the private-equity firm’s managing partner and chief investment officer since 2013, will become chairman of Tegna’s new board, replacing Howard D. Elias.

Deb McDermott, who is Standard Media’s CEO, will become chief executive officer of the private Tegna company.

Deb McDermott

“We are pleased to have reached this agreement with Standard General, which follows a thorough review of acquisition proposals received by the company. After evaluating this opportunity against Tegna’s standalone prospects and other strategic alternatives, our Board concluded that this transaction maximizes value for Tegna shareholders,” Elias said in a statement on Tuesday. “Thanks to the team’s stellar execution of the company’s value-creation strategy, Tegna has positioned itself as a leading broadcast television group serving the greater good of the communities in which we operate – and as a private company will have an enhanced ability to keep evolving its local news, programming, and marketing solutions to serve its communities in a rapidly changing media landscape.”

“As long-term investors in the television broadcasting industry, we have a deep admiration for Tegna and the stations it operates and, in particular, for Tegna’s talented employees and their commitment to serving their communities,” Kim added. “We are excited to partner again with Deb McDermott, who previously spearheaded the broadcast group at Media General, where Standard General was a principal shareholder.”

Earlier Posting...

UPDATE 9:15 AM:  Tegna said it has agreed to be acquired by Standard General in a deal worth $8.6 billion, including the assumption of $3.2 billion in debt.

Tegna shareholders will get $24 for the shares and Apollo Global's Cox Media Group will acquires Tegna stations in Dallas, Houston and Austin. 

Apollo will own securities in the new privately held company. Those securities will be non-voting and not attributable.

Standard General, led by investor Soo Kim, has been pursuing Tegna for two years, criticizing the company's management. It lost a proxy fight aimed at gaining seats on Tegna’s board last year. Byron Allen's Allen Media Group also was reportedly bidding for Tegna.

Earlier Posting 3AM..

Standard General and Apollo Global Management Inc. are nearing a deal to acquire television broadcaster Tegna Inc. in a transaction valued at $24 a share, according to Bloomberg citing people familiar with the matter.

An agreement could be announced as soon as Tuesday. In a nod to potential antitrust scrutiny of the deal, the buyers have agreed to pay an additional amount per share for each month that the regulatory review takes after an initial period, the people said. 

The price increases by incremental amounts from 5 cents per share after the first nine months, to 12.5 cents per share in the 15th month and beyond, they said. Apollo would receive preferred shares in Tegna and won’t have voting rights, as previously reported by Bloomberg News.

No final decision has yet been reached and talks could still fall through, the people said. 

Tegna shares closed at $20.95 in New York trading Friday, giving the Virginia-based company a market value of $4.6 billion.

Standard General and Apollo had offered about $22 a share for Tegna, Bloomberg News reported in September. That bid was later bumped to $22.65 per share and then to $24, people familiar with the matter said. Their rivals included media mogul Byron Allen, who had teamed up with Ares Management Corp. last year to offer $23 per share.

The agreement would consummate a years long takeover saga for Tegna, which owns 64 news stations throughout the U.S. as well as media properties such as the True Crime Network, according to its website. Apollo had been in talks to acquire the company two years ago, but ended discussions as the early days of the Covid-19 pandemic upended markets. 

Negotiations were rebooted last year, and the parties have been haggling over issues including Tegna’s concerns that regulators would nix any sale given Apollo’s ownership stake in competitor Cox Media Group, Bloomberg News has reported.

New York-based Standard General, which was founded in 2007 by Soo Kim, primarily manages event-driven funds but it has been known to be an acquirer in the past.