After years of back and forth, Tegna on Tuesday said it had agreed to be acquired by Standard General and Apollo Global Management, which owns Cox Media Group and its 33 television stations, in a deal worth $8.6 billion, including debt.
Standard General will pay $24 per share in cash, a 39% premium over the company’s unaffected closing share price on September 14, 2021, the last full trading day prior to the day media speculation about Tegna’s potential sale began anew. That also marks an 11% premium over the all-time closing share price since Tegna separated from Gannett and its publishing business in 2015. Under the deal, Tegna will become a privately held company, and its shares will no longer be traded on the New York Stock Exchange.
“We are pleased to have reached this agreement with Standard General, which follows a thorough review of acquisition proposals received by the Company,” said Howard D. Elias, chairman of Tegna’s board. “After evaluating this opportunity against Tegna’s standalone prospects and other strategic alternatives, our board concluded that this transaction maximizes value for Tegna’s shareholders. 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.”
The acquisition of Tegna represents a victory for Soo Kim, founding partner of Standard General and an activist Tegna shareholder who has been in pursuit of the company since 2020. Tegna and its president and CEO, Dave Lougee, successfully fended off Standard General’s advances, but due to the interests of its board and shareholders, could not keep Standard General at bay forever.
To complete the deal, Kim and Standard General partnered with Apollo Global Management, which provided some of the financing. Apollo will receive securities in the new company but will not have voting rights. Media mogul Byron Allen also had been circling a deal, but rumors of Allen’s involvement had faded in recent weeks.
Upon closing of the deal, Standard General plans to sell Apollo/Cox three of Tegna’s Texas operations: KVUE Austin, WFAA/KMPX Dallas, KHOU/KTBU Houston, while Cox will sell WFXT Boston to the new Tegna. It’s not clear if that arrangement will pass regulatory muster, especially since Apollo Global is a stakeholder in both companies. Standard General will owe Tegna a $250 million breakup fee if the deal is rejected, reports the New York Post, although that’s half of the $500 million on which Tegna had been reportedly asking.
Deborah McDermott, chief executive officer of Standard Media who formerly served as chief operating officer of Media General and president and CEO of Young Broadcasting, will lead the new company as CEO. Kim will serve as chairman of the board.
At the time of purchase, Tegna owns 64 television stations in 51 U.S. markets as well as multicast networks True Crime Network, Twist and Quest. It also owns over-the-top advertising service Premion, which will be operated separately by Standard General and Cox Media Group once the deal closes.
The transaction, which is subject to approval by Tegna shareholders as well as to regulatory approvals, is expected to close in the second half of this year.