Tegna is on its way to becoming a private company, as shareholders yesterday voted to approve the acquisition by Standard General. Approximately 78% of Tegna’s outstanding common shares approved the agreement, with the deal expected to close on schedule – sometime in the second half of this year.
Following the transaction’s close, Standard Media CEO Deb McDermott will take over as CEO of Tegna, replacing Dave Lougee, who will depart the company. The $8.6 billion acquisition is still subject to regulatory approval and other customary closing conditions.
Standard General also plans to sell off its Tegna stations in Austin, Dallas and Houston to Cox Media Group once the deal is finalized, in accordance with the Federal Communications Commission’s media ownership rules – which bar single companies from owning broadcast television stations that reach more than 39% of U.S. households.
Tegna is in a healthy financial position for the deal. The company recently reported a record first quarter revenue of $774 million, with net income jumping to $134 million. A strong showing despite Tegna’s carriage disputes with a couple of major U.S. distributors. Tegna last October missed its deadline for a new agreement with Dish Network, resulting in a Tegna channel blackout for nearly 3 million Dish TV customers. After a months-long dispute, the companies reached a new carriage agreement in February.
Tegna also earlier this year faced a carriage dispute with Mediacom, the fifth largest U.S. cable operator. Mediacom subscribers also suffered from a Tegna channel blackout until the two companies worked out an agreement – which included retransmission consent for 12 Tegna-owned stations in Mediacom markets.
As Tegna prepares to go private, the broadcasting company has also been making technological enhancements for its 64 stations. Tegna earlier this month announced it will revamp streaming apps for each station, enabling 24-7 livestream coverage among other features.