TV broadcaster Tegna says coronavirus derailed acquisition talks

Mergers and acquisitions deals consolidation
Tegna has 62 television stations in 51 markets. (Getty/Kritchanut)

Tegna, a television broadcast group and OTT advertising company, has thrown some cold water on recent reports about acquisition interest from multiple parties.

The company said its advisors engaged substantially with parties, and provided them extensive non-public due diligence information. The two parties made their proposals shortly before the recent “market dislocation due to the COVID-19 pandemic and both subsequently informed Tegna that they were ceasing discussions.”

Gray Television reportedly offered to buy Tegna for $8.5 billion, and Apollo Global Management reportedly offered to buy the company for $20 per share.

Tegna said two other parties interested in an acquisition have not signed confidentiality agreements to enable due diligence, and have not delivered any information on financing sources.

“In addition to our focus on executing our standalone plan, the Tegna Board and management have meaningfully engaged with third parties to explore opportunities to create value. The Board has been, and remains, willing to consider transactions that create compelling value, and our focus now is on helping management navigate through an unprecedented environment,” said Howard Elias, chairman of the Tegna’s board, in a statement.

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“Like every other company, Tegna is operating in uncharted waters due to COVID-19 as we focus on ensuring the health and safety of our employees while continuing to create and preserve value. High-quality local news has never been more important, and we are fortunate to have significant contractual subscription revenues and a strong balance sheet with minimal near-term debt maturities. We are working through the current challenges raised by COVID-19 and are very confident that our long-term growth drivers remain intact,” said Tegna CEO Dave Lougee in a statement.

Standard General, which owns nearly 10% of Tegna, accused the broadcaster of making the acquisition process unnecessarily complicated.

“We understand that Tegna's process has stalled because, amid a global emergency and capital markets dislocation, this Board has created arbitrary deadlines and unnecessary preconditions. By their own admission, the company has been unwilling to provide access to information unless suitors first demonstrate certainty of financing. This approach would be off market in any deal environment, and particularly so under current market conditions. The Board’s actions appear designed to end this process before it can even begin in earnest," said Soo Kim, founding partner at Standard General, in a statement. "This is just the latest in a troubling pattern of behavior. It should never have come to this, and shareholders need to hold this Board accountable.”

Tegna has 62 television stations in 51 markets. The company said it’s the largest owner of top-four affiliates in the top 25 markets among independent station groups, reaching approximately 39% of all television households nationwide. Tegna also owns multicast networks Justice Network and Quest, and Tegna Marketing Solutions, which operates across television, email, social and OTT platforms, including Premion, Tegna’s OTT advertising service.

This article has been updated to include a statement from Standard General.