It's been years in the making (rumors going back to at least 2020, maybe before), and now we know that it is Standard General who is buying TEGNA.
UPDATE 2023
Tegna scraps $8.6 bln Standard General deal after regulatory pushback
In Texas, the news goes even further as we see the breakup of the original Belo broadcast stations beyond the Standard General sale.
Once the deal goes through, KHOU 11 - KTBU Houston, WFAA 8 - KMPX Dallas and KVUE Austin are expected to be acquired by Cox Media Group (CMG) from Standard General. These Texas television stations will now join the ranks of CMG powerhouses like WSB Atlanta and WSOC Charlotte, NC
In Houston, this means that KHOU 11 is now sister-stations with The New 93Q KKBQ, Houston’s Eagle 106.9 KHPT & 107.5 KGLK and Country Legends 97.1 KTHT which are all owned by CMG.
That leaves former Belo station KENS 5 San Antonio separate from the rest of the old Texas owned group and staying with Standard General.
In Texas, TEGNA owns KHOU Houston, WFAA Dallas, KENS San Antonio, KVUE Austin, KCEN Waco, KAGS College Station, KYTX Tyler, KIII Corpus Christi, KBMT-KJAC Beaumont, KXVA Abilene and KIDY San Angelo.
Lots of questions are coming in about the two new owners.
Standard General bills itself as a New York-based investment firm that manages event-driven opportunity funds.
In 2019, Cox Enterprises, Inc. sold its television and radio stations to a new company still operated under the Cox Media Group or CMG name, that is majority owned by private equity funds managed by affiliates of Apollo Global Management, Inc. In the same press release about the sale, Apollo Global Management writes it is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo.
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HERE IS THE OFFICIAL TEGNA PRESS RELEASE ON THE ACQUISITION:
TEGNA to be Acquired by Standard General for $24.00 Per Share
Will Become Nation’s Largest Minority-Owned, Woman-Led Broadcast Group
Tysons, Va. and New York – TEGNA Inc. (NYSE: TGNA) and Standard General L.P. today announced that TEGNA and an affiliate of Standard General have entered into a definitive agreement under which TEGNA will be acquired by the Standard General affiliate for $24.00 per share in cash. The transaction has an equity value of approximately $5.4 billion and an enterprise value of approximately $8.6 billion, including the assumption of debt.
The transaction consideration represents a premium of approximately 39% to TEGNA’s unaffected closing share price on September 14, 2021, the last full trading day prior to media speculation about a potential sale of TEGNA, and a premium of approximately 11% to TEGNA’s all-time high closing price since separation from the Gannett publishing business in 2015. The transaction was unanimously approved by the TEGNA Board.
Howard D. Elias, Chairman of the TEGNA Board, said, “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. 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.”
Soo Kim, Founding Partner of Standard General, commented, “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. 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. 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. We look forward to building on the Company’s strong foundation and leveraging Deb’s deep industry experience to drive further growth.”
Following the close of the transaction, Deb McDermott will become CEO and Mr. Kim will serve as Chairman of a new Board. Ms. McDermott currently serves as CEO of Standard Media and has more than 20 years of experience leading broadcast groups, including previously serving as COO of Media General and as CEO and President of Young Broadcasting. In these roles, she has served as a key member of the leadership teams responsible for the successful acquisition, integration, and operation of more than 90 stations.
Dave Lougee, President and CEO of TEGNA, said, “This transaction is the next step in TEGNA’s evolution and recognizes the value of our portfolio of leading broadcast assets and innovative digital brands. TEGNA’s employees deserve tremendous credit for their commitment to serving our viewers with high-quality news and content that informs and supports our local communities. At all levels, we have been tireless in our efforts to ensure TEGNA effectively serves all of our stakeholders, and I am immensely proud of these efforts. Our hard work has built a company that is a leading and trusted local news and media content provider in the markets it serves and has fostered a culture of diversity and inclusiveness. We are deeply gratified that TEGNA’s new owners value and embrace our purpose to serve the greater good of our communities. Deb McDermott is an experienced and accomplished broadcast executive, and we are confident in TEGNA’s future under her leadership.”
Ms. McDermott commented, “I am honored to lead TEGNA’s team to create new opportunities and build on its heritage and successes achieved under Dave’s leadership. TEGNA’s stations have earned excellent reputations as leading local content providers, and TEGNA’s digital and content assets are a key part of its future in an evolving media landscape. These achievements are a credit to the hard work of TEGNA’s dedicated employees, who are the Company’s most valuable asset. I’m very excited about what the future holds for TEGNA.”
Transaction Details
The transaction is subject to approval by TEGNA shareholders, regulatory approvals, and other customary closing conditions, and is expected to close in the second half of 2022.
Under the terms of the definitive merger agreement, in addition to receiving $24.00 per share, TEGNA shareholders will receive additional cash consideration in the form of a “ticking fee” of $0.00167 per share per day (or $0.05 per month) if the closing occurs between the 9- and 12-month anniversary of signing, increasing to $0.0025 per share per day (or $0.075 per month) if the closing occurs between the 12- and 13-month anniversary of signing, $0.00333 per share per day (or $0.10 per month) if the closing occurs between the 13- and 14-month anniversary of signing, and $0.00417 per share per day (or $0.125 per month) if the closing occurs between the 14- and 15-month anniversary of signing.
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 (“CMG”) from Standard General.
Also after closing, Premion is expected to operate as a standalone business majority owned by Cox Media Group and Standard General.
Upon completion of the transaction, TEGNA will become a private company and its shares will no longer be traded on the New York Stock Exchange.
Financing
An affiliate of Standard General will hold substantially all of the voting, common equity in the new entity that is acquiring TEGNA, with CMG and funds managed by affiliates of Apollo Global Management to hold securities in the new entity that will be non-voting and non-attributable and with other investors holding non-voting interests. A syndicate of banks led by RBC Capital Markets will provide debt financing.
Advisors
J.P. Morgan Securities LLC is acting as lead financial advisor, with Greenhill & Co. also acting as a financial advisor to TEGNA, and Wachtell Lipton Rosen & Katz and Covington & Burling LLP are acting as its legal advisors. Moelis & Company and RBC are acting as financial advisor to Standard General and Fried Frank Harris Shriver & Jacobson LLP and Pillsbury Winthrop Shaw Pittman LLP are acting as its legal advisors.
About TEGNA
TEGNA Inc. (NYSE: TGNA) is an innovative media company that serves the greater good of our communities. Across platforms, TEGNA tells empowering stories, conducts impactful investigations and delivers innovative marketing solutions. With 64 television stations in 51 U.S. markets, TEGNA is the largest owner of top 4 network affiliates in the top 25 markets among independent station groups. TEGNA also owns leading multicast networks True Crime Network, Twist and Quest. TEGNA offers innovative solutions to help businesses reach consumers across television, digital and over-the-top (OTT) platforms, including Premion, TEGNA’s OTT advertising service. For more information, visit www.TEGNA.com.
About Standard General
Standard General was founded in 2007 and manages capital for public and private pension funds, endowments, foundations, and high-net-worth individuals. Standard General is a minority-controlled and operated organization. Mr. Kim is supported by a diverse, highly experienced 17-person team, including seven investment professionals with over 120 years of collective investing experience.
*this post has been updated throughout the day
