Tegna said it received 8.64 million of its shares from Standard General, whose effort to buy the broadcaster failed as regulatory review extended beyond the data its financing expired. Standard General’s deal with Tegna called for a $136 million termination fee, and Tegna said the shares it received satisfied that obligation.
Thwarted in his bid to buy Tegna by an overlong and deal-breaking FCC review process, Soo Kim (and his right hand Deb McDermott) is indeed a victim of prejudice and discrimination. Only it’s probably not the sort you may think.
With Standard General’s deal to buy Tegna hanging by a thread, the broadcaster may continue on its pre-deal trajectory or be sold in pieces, analysts say. But the FCC’s glacial review process, which may have been triggered by private equity’s role in the deal, has had a chilling impact on other potential large transactions in the industry. Note: This story is available to TVNewsCheck Premium members only. If you would like to upgrade your free TVNewsCheck membership to Premium now, you can visit your Member Home Page, available when you log in at the very top right corner of the site or in the Stay Connected Box that appears in the right column of virtually every page on the site. If you don’t see Member Home, you will need to click Log In or Subscribe.
Even before the U.S. Court of Appeals for the D.C. Circuit denied Standard General’s petition to force the FCC to vote on its proposed $8.6 billion acquisition of Tegna, company founder Soo Kim knew his last-ditch legal maneuvers were a long shot. Nevertheless, Kim seemed disappointed, frustrated and chagrined that the deal appears likely to die when the financing he assembled expires on May 22.
Comcast and Standard General have struck an agreement confirming Standard General’s pledge to the FCC that it would agree not to raise the retransmission consent rates of Tegna stations charged to MVPDs to that of its Cox Media Group TV stations — if applicable — after the closing of its deal to buy those Tegna stations. That is according to Standard General, which said the agreement on not raising the rates was reached this week with Comcast, which is the largest cable group carrying Tegna stations.
The satellite company calls Cox Media Group’s claims “misleading at best.”
Paducah Television, based in Providence, R.I., operates stations, in Lincoln, Neb.; Cape Girardeau, Mo.; and Providence, and doing business as Standard Media, said Dish refused offers from bit and was insisting on significant rate reductions.
Standard General (SGCI) has told the FCC that the two-week comment extension it has granted on the proposed Standard General-Tegna merger could cost the company millions of dollars. SGCI, in opposing a comment extension the FCC ultimately granted, told the FCC that the way the deal is structured the per-share price SGCI has to pay escalates based on the closing date.
When the $5.4 billion buyout of Tegna is OK’d, Standard General, with Soo Kim and Deb McDermott in charge, will be a new major force, second only to Nexstar on the TVNewsCheck-BIA Advisory Services annual list of the television station groups ranked by total revenue.
The NewsGuild-CWA and and the National Association of Broadcast Employees and Technicians (NABET)-CWA filed a petition to dismiss or deny the deal with the FCC on Wednesday (June 22), the deadline for such filings. They say the deal, which was approved by Tegna shareholders in May, and interrelated transactions — what they labeled an “unprecedented array of sequenced transactions and swaps” — are actually an attempt to “game the commission’s ownership and retransmission consent rules in ways that contravene the commission’s public interest standard.”
The NewsGuild-CWA is asking President Biden to urge the FCC to block the purchase of Tegna TV stations by investment fund Standard General and Apollo Global Management. The guild, the nation’s largest union representing journalists, told the President in an open letter circulated widely Thursday (June 2) that the deal “would kill journalism jobs, undermine local news and raise prices for American families.”
Critics of the $8 billion-plus purchase of Tegna’s TV station group by investment fund Standard General have told the FCC it needs to collect more data on the proposed merger before it rules on whether it is in the public interest. Common Cause, joined by the NewsGuild-CWA union and Public Knowledge, have filed a formal motion for both additional documents that the FCC and the public can peruse and an extension of time to weigh in. Currently, the FCC has set a May 23 deadline for those wishing to formally oppose the deal.
A Tegna shareholder has sued the broadcaster and its board seeking to enjoin the company from closing its sale to Standard General because its proxy statements are “false and misleading.” Marc Waterman, who says in the suit he is an owner of Tegna common stock, filed the suit in the United States District Court on March 30.
Change is coming to Tegna. Standard General, which won a drawn-out auction for the broadcaster, believes local stations are valuable assets even as most of the television industry pivots to streaming. If Standard General thought local stations were being made obsolete by cord-cutting and the other forces eroding traditional ratings, then “we’re not making an investment this large,” Standard General founding partner Soo Kim says.
Hedge fund investor Soo Kim takes a long-sought prize in Tegna’s sale to Standard General and Apollo Global Management. The deal has many layers to tease out and potential regulatory headwinds, along with questions about the new regime’s depth of commitment to news.
Following the close of the $24-a-share transaction, Deb McDermott will continue to lead the group. Tegna stations in Austin (KVUE), Dallas (WFAA and KMPX) and Houston (KHOU and KTBU) are expected to be acquired by Cox Media Group from Standard General. Also after closing, Premion is expected to operate as a standalone business majority owned by Cox Media Group and Standard General.
Tegna is in advanced discussions with one of its largest shareholders, Standard General, about a potential buyout at about $24 a share.
Standard General and Apollo Global Management are closing in on a roughly $9 billion deal for television station owner Tegna, sources close to the situation say. The buyers and Tegna have cleared what sources saw as the major stumbling block: how much the Standard General-Apollo team would need to pay if the deal takes more than a year to clear the FCC and other regulators.
Tegna has hit a roadblock in negotiations with suitors who are looking to buy the company in a deal worth $8.4 billion, sources close to the situation say.
An auction of the Tegna TV station empire has been thrown into doubt as the company has questioned whether a prospective sale to a leading bidder would face antitrust concerns from U.S. regulators.
The New York Post is reporting that Apollo Global Management has teamed with Soo Kim’s Standard General to make an $8 billion binding bid on Tegna Monday. The Apollo-Standard General bid was about $22 a share. Byron Allen was also reportedly considering bidding on Monday.
Dave Lougee, president and CEO, said: “We are pleased that our shareholders recognize the successful execution of our value-creation strategy, which is delivering record results.”
The station group’s largest active shareholder is demanding Tegna open its books for an investigation into charges of bias and discrimination. The station group, meanwhile, says the allegations against it are “distorted.”
Standard General, the largest active shareholder of Tegna, is questioning the station group’s handling of an investigation into a 2014 incident where CEO Dave Lougee mistook a Black executive for a valet.
After Tegna rejected its proposed board members, minority owner Standard General, one of the company’s largest shareholders, is soliciting proxies for the Tegna annual shareholders meeting so it can seat those candidates anyway. That is according to an SEC filing Wednesday, March 17, in which Standard General said it is seeking to place three board members to help diversify the board, and cited the withdrawal of their fourth candidate, former FCC official and top ad association executive Adonis Hoffman, as a reason for needing to add that diversity.
Tegna CEO Dave Lougee’s apology to former board nominee Adonis Hoffman over a racially charged incident has been accepted, but Hoffman is amping up criticism of the company’s response. The back-and-forth is occurring against the backdrop of a proxy battle for Tegna. The company has rebuffed acquisition overtures despite the preferences of some of its privately held investors. One stakeholder — Soo Kim’s hedge fund Standard General — is calling for a shakeup of the board and had initially nominated Hoffman for a seat.
The defeat of a proposal by Standard General’s Soo Kim is a victory for Tegna Chairman Howard Elias and CEO David Lougee and followed announcement of a 7 cents a share dividend to shareholders earlier this morning.
Soo Kim’s ill-timed persistence for seats on Tegna’s board has been undermined by statements from three influential proxy advisers. And that’s a good thing. Current management led by CEO David Lougee may have its faults, but it beats Kim, whose goal is to merge or sell the company out of existence.
All three proxy advisory firms recommend against the election of Soohyung Kim to the Tegna board.
Proxy adviser Glass Lewis & Co. says: “We believe Tegna shareholders would be best served at this time by voting to elect all of the company’s director nominees,” rejecting the move by Standard General to add four directors to the company’s 12-member board.
Proxy adviser Institutional Shareholder Services said on Friday that Tegna shareholders should elect one of hedge fund Standard General’s director nominees to the broadcast company’s board. ISS backed Colleen Brown, saying that her “direct experience with local stations would appear to be additive to the board.” ISS recommended that shareholders not vote for three other dissident nominees, including Soohyung Kim, the hedge fund’s founder, who has been pushing the company to consider selling itself.
The company seeks to correct “Standard General’s many errors and false and misleading statements” while detailing Tegna’s “strong performance, experienced board, and focus on shareholder value.”
Activist investor Standard General on Friday said it has increased its stake in Tegna to 12%, a 20% increase. Standard General, which is mounting a proxy fight to get a slate of four directors added to Tegna’s board, said that it believes that it is now the largest shareholder in the broadcaster.
Tegna branded the sale of 5 million shares in the broadcaster by activist investor Standard General as something that should be “troubling” to stockholders being asked to put Standard General nominees on the Tegna board.
The TV group says two of the four unsolicited acquisition proposals have been withdrawn in the wake of the coronavirus pandemic and the other two parties have not signed confidentiality agreements to enable due diligence and have not delivered any information on financing sources.
A large shareholder of broadcaster Tegna, fund managers Standard General, has proposed an alternative slate of five new directors to counter what it calls “a continuing pattern of passivity” in financial performance, and to ensure the board considers multiple acquisitions offers.
The company today appointed Karen Grimes to its board as a new independent director and also declared a dividend of 7 cents per share, payable on April 1 to stockholders of record as of the close of business on March 6. It rejected “the four Standard General nominees to Tegna’s board.”
Standard General LP, the hedge fund that once sold a collection of newspapers to Warren Buffett, is back in the media business with a stake in TV broadcaster Tegna Inc. and is on the hunt for a deal.