Tegna slips after FCC delays Standard General's proposed $5.4 billion takeover
By Scott Kanowsky
Investing.com -- Shares in Tegna Inc (NYSE:TGNA) shed nearly a fourth of their value in pre-market trading on Monday after U.S. regulators put the brakes on a potential multibillion-dollar takeover of the television station operator by hedge fund Standard General.
Under the terms of the agreement first made in February 2022, Standard General would purchase Tegna in a deal that would value the company behind 64 TV stations across the U.S. at $5.4 billion. Standard General founding partner Soo Kim and executive Deb McDermott would helm the combined entity, which would retain the Tegna name.
But on Friday, the Federal Communications Commission called for a hearing on the proposed merger, delaying the timeline for the tie-up and sparking concerns that the deal may be scrapped entirely.
FCC chairwoman Jessica Rosenworcel said in a statement that the commission still wanted to see further assurances that the move would not lead to anti-competitive price rises or job losses in newsrooms.
“The additional review will allow us to make a more informed assessment on whether proposed safeguards are sufficient to protect the public interest, and we will take the time needed to address these critical questions,” Rosenworcel added.
Analysts at Benchmark Company said it seems evident that the FCC believes that "something illicit" may be going on with the structure of the deal. The commission's order, it argued, is "effectively killing" the transaction.
Standard General previously said in late 2022 that it would not slash jobs at the stations until at least two years after the deal is closed.
Local news content at Tegna stations would also be supplemented via its operations in Washington D.C., Standard General also said. Critics, including former U.S. House Speaker Nancy Pelosi, have voiced worries that the agreement would lead to cuts to local journalists and "less local news."
Meanwhile, Standard General has promised to keep Tegna separate from rival Cox Media Group, which is principally owned by private equity firm Apollo Global Management (NYSE:APO). Apollo is a backer of Standard General's purchase of Tegna and would hold an unspecified amount of nonvoting shares in Tegna should the deal be approved.
Shares slumped in after hours trading on Friday following the announcement. As of 09:02 EST on Monday, the stock was exchanging hands at $16.56, nearly a third below the merger's agreed price of $24 a share.
Related Articles
Tegna slips after FCC delays Standard General's proposed $5.4 billion takeover
Albemarle, Livent rise as China clamps down on illegal lithium mining
Stellantis, unions agree 2,000 voluntary job cuts in Italy this year
