Standard General to Buy Broadcaster Tegna for $5.4 Billion
The investment firm agreed to pay $24 a share in cash, 39% above Tegna’s Sept. 14 closing price.
(Bloomberg) -- Standard General agreed to acquire Tegna Inc. for $5.4 billion, consummating a yearslong takeover saga for the television broadcaster.
The investment firm agreed to pay $24 a share in cash, 39% above Tegna’s Sept. 14 closing price, before media accounts about a possible sale. The deal is expected to close in the second half, according to a statement Tuesday that confirmed a Bloomberg News report. The companies valued the deal at about $8.6 billion, including the assumption of debt.
“We believe Tegna has a strong foundation and exciting prospects for continued growth as a result of the stewardship of the Board and the current management team,” said Soo Kim, founding partner at Standard General, in the statement.
In a nod to potential antitrust scrutiny of the purchase, the buyers agreed to pay more if the closing takes longer than expected. The price increases incrementally from 5 cents a share per month after the first nine months, to 12.5 cents in the 14th and 15th months.
Apollo Global Management Inc. will receive securities in Tegna and won’t have voting rights. After the close, Tegna stations in Austin, Dallas and Houston, Texas, will be acquired by Cox Media Group.
Tegna’s shares jumped more than 7% in early trading Tuesday to $22.45, below the offer price, at 9:35 a.m. in New York.
Standard General and Apollo had previously offered about $22 a share for Tegna, Bloomberg News reported in September. That bid was later bumped to $22.65 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 a share.
The agreement follows years of pursuit of 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 made acquisitions. In 2015, it bought more than 1,740 Radio Shack stores through General Wireless Inc., as well the Radio Shack brand in auction related to its bankruptcy.
Standard General has run two unsuccessful boardroom battles at Tegna in recent years, arguing in both cases that the company was underperforming and in need of a shake-up.
After the close of the Tegna transaction, Kim will serve as chairman and Deb McDermott, who runs Standard Media, will become chief executive officer.
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