Sinclair looking to lock up deal for Tribune Media before May 8, report says

Image: Sinclair

Sinclair Broadcast Group could have a tentative deal in place to acquire Tribune Media by or before May 8, when Tribune is scheduled to report quarterly earnings.

According to Bloomberg, the deal could be priced in the high-$30s per share. As of 11 a.m. EST today, Tribune Media stock is trading around $38.16 per share, putting its market cap at around $3.38 billion.

In March, reports suggested that Sinclair was closing in on a deal to acquire Tribune’s 42 TV broadcast stations and its ownership stakes in WGN and the Food Network. But other reports said Sinclair may only be looking at certain pieces of Tribune.

Jefferies analyst John Janedis said an outright sale of Tribune to Sinclair was less likely than Tribune agreeing to sell off certain assets.

“While there are a lot of moving pieces, we think an outright sale to SBGI as a potential option in the press carries risk. While the FCC will likely reinstate the UHF discount later this month, we also think it will ultimately be eliminated in late '17 & uncertainty around grandfathering deals in the interim and the cap could be an issue,” wrote Janedis in a research note.

RELATED: Nexstar to benefit most when FCC reinstates UHF discount, analyst says

The FCC is today voting on an order to reinstate the UHF discount and allow broadcasters to return to counting lower-power UHF stations at only 50% toward the national ownership cap, which currently limits broadcasters from owning TV stations that reach more than 39% of audiences nationwide.

With that order expected to move forward, many are anticipating a renewed flurry of M&A in the broadcast industry.

RELATED: Fox might stick wrench into Sinclair’s pursuit of Tribune: report

While the UHF discount and ownership cap might not be roadblocks to a future deal for Sinclair and Tribune, 21st Century Fox could reportedly stand in the way of a deal getting done. Bloomberg reported last month that investors are urging Fox management to jump in the fray and derail the potential deal so that Fox, along with other strategic investors, could have a chance to snap up Tribune Media at a later date.