Tegna Issues Proxy Fight ‘Fact Sheet’
Tegna Inc. today issued a fact sheet to correct what it called “the numerous factual errors and false and misleading statements made by Standard General to further its ill-considered proxy fight led by Soohyung Kim, who is seeking Tegna Board seats for himself and three other hand-picked nominees.”
Howard D. Elias, chairman of the board, said: “At a time when steady, experienced leadership is needed more than ever, Standard General is seeking to destabilize Tegna’s board of directors and is misleading Tegna shareholders with a campaign of disinformation and disregard for the truth. The numerous errors, false statements and mischaracterizations demonstrate that Mr. Kim either does not understand our business or is intentionally trying to mislead our shareholders to get their votes. Based on the facts, as well as the strong track record of our board and management team, the choice is clear — and we thank our shareholders for their support.”
As shareholders cast their votes ahead of the annual meeting on April 30, Tegna said it believes “it is imperative to set the record straight. Key facts and falsehoods are excerpted below.”
Fact: Tegna has substantially outperformed its peers since becoming a pure- play broadcasting company. — Standard General tries to distract from this stock price outperformance with misleading “analysis” that is based on performance before Tegna became a pure- play company, omits “peers” included in Tegna’s 10-K and proxy statement, and excludes Tegna’s recent pre-COVID stock price performance. Standard General ignores Tegna’s continued strong financial performance and instead wrongly attributes stock price outperformance to its public campaign and M&A speculation.
Fact: Tegna has top-of-market Big-Four retransmission rates. — Standard General’s “analysis” is fundamentally flawed and uses an inappropriate and misleading comparison between Big-Four and non-Big-Four affiliates. It is also based on outdated Wall Street research from 2019 and includes smaller networks irrelevant to Tegna’s portfolio that is primarily large market Big-Four stations.
Fact: Tegna’s EBITDA margin is above the peer median. — Standard General misrepresents Tegna’s EBITDA margins while also inappropriately limiting and cherry-picking Tegna’s peer set.
Fact: Tegna has leading station productivity. — Standard General cites an irrelevant metric of Tegna’s employees per station. What is relevant is that Tegna has the highest EBITDA per employee – more than $137,000 — in comparison to peers Nexstar and Gray, both less than $115,000.
Fact: Tegna is open to transactions and all paths to create shareholder value. — Standard General’s assertion that Tegna is not open to transactions and that the Board failed to engage with suitors mischaracterizes and contradicts the facts explained in Tegna’s public disclosures, SEC filings, and in numerous press accounts.
Fact: Tegna has a strong track record of disciplined, value-accretive M&A. — Standard General baselessly attacks Tegna’s track record of value-creating M&A based on many false claims, including unjustified criticism of Tegna’s methodology for determining purchase price multiples.
Fact: Tegna’s recent refinancing transactions were designed to generate interest savings and have the same call provisions included in previous debt issuances. — Standard General is simply wrong in saying these bonds have “onerous ‘no call’ features” and anti-takeover motivations. Tegna undertook these refinancing transactions in the ordinary course to refinance existing debt at attractive rates.
Fact: Mr. Kim falsely claims credit for engineering Media General’s sale to Nexstar, a transaction he opposed while pushing as a board member for an acquisition of Meredith Corporation. — As lead independent director of Media General, Mr. Kim played a central role in conceiving of, negotiating and pushing a divided board to acquire Meredith Corporation while rejecting multiple attractive offers from Nexstar to acquire Media General. Only after public opposition from significant shareholders, including Oppenheimer and Starboard Value, did the Media General board “sideline” Mr. Kim and enter into the Nexstar deal.
Fact: Mr. Kim has demonstrated an ego-driven focus on personal representation and does not share the board’s focus on the interests of all shareholders. — Mr. Kim has summarily rejected any settlement that does not include a Board seat for himself. His campaign to replace Tegna’s Independent Chairman and the Chairs of three Board committees during a global crisis should trouble investors.
Fact: Throughout this ill-considered proxy fight, Standard General has demonstrated a questionable disclosure and compliance record. — Standard General continues to obfuscate the facts about its beneficial ownership of Tegna shares and potential Section 16 short-swing trading liability and Section 13D violations. Mr. Kim has also hidden from shareholders that while his nominee Deb McDermott is shown as the 100% equity owner of Standard Media, Standard General has an option to acquire 99% of Standard Media (along with an option on assets of Standard Media and equity owned by Deb McDermott).
Tegna’s full fact sheet is available here.