Tegna To Fight Proposed Board Change
The Tegna board said today that it would oppose the addition of hedge fund investor Soo Kim to the board, setting the stage for a possible proxy fight.
Following an investigation, the board said in a press release this morning, it has “serious concerns about Mr. Kim’s prior business and board service, including a track record of endorsing and executing corporate actions in favor of his own investments to the detriment of other shareholders.
“The board is also concerned that his significant investments in and influence over other broadcasting companies would create a conflict of interest as a Tegna director.
“Accordingly, the board unanimously determined that adding him to the board is not in the best interests of Tegna and its shareholders. Mr. Kim was informed of the board’s decision on Jan. 10.”
Soo Kim, who heads the Standard General hedge fund, rolled up Young Broadcasting and LIN Media into Media General before selling Media General to Nexstar for $4.6 billion in 2017.
In addition to Kim, Standard General nominated three other for the board. They are:
Deborah McDermott, the chief executive officer of Standard Media Group LLC. McDermott has more than 20 years of experience leading broadcast groups, most recently as chief operating officer of Media General and as chief executive officer and president of Young Broadcasting.
Colleen B. Brown, the founder of Marca Global LLC, a marketing technology company. Brown served as president and chief executive officer of Fisher Communications Inc. from 2005 to 2013 and as a director of Fisher Communications from 2006 to 2013. She also served as senior vice president of Belo Corp., president of the television division of Lee Enterprises and president and general manager of various companies at Gannett Co.
Ellen McClain Haime, the chief financial officer of Year Up, Boston, MA, a not-for-profit provider of job training services. She previously served as VP, finance of Hearst-Argyle Television. Prior to her role at Hearst-Argyle, she was senior vice president, chief financial officer and vice president, corporate development at Granite Broadcasting Corp.
Regarding the other nominees, Tegna said: “the board will evaluate the three other Standard General nominees, who were identified for the first time today by Mr. Kim, consistent with Tegna’s standard review process.”
Kim is also backing McDermott in her quest to build a station group from the ground up. She started by acquiring two small-market stations from Citadel last May and followed that up by buying nine small-market stations in six markets from Waypoint Media and Vision in November.
Last October, Bloomberg reported that that Kim’s Standard General had acquired a 9.8% stake in Tegna, making it Tegna’s third largest shareholder.
At that time, Standard General claimed that Tegna was underperforming and missing lucrative M&A opportunities. Standard General then demanded two seats on the board.
Tegna responded to the criticism in today’s press release. “Recent press accounts in which Mr. Kim implies that he was ‘stonewalled’ by Tegna regarding M&A are patently false.
“Mr. Kim has not suggested any transactions to us, and our board and management team have a track record that demonstrates their openness to all paths to create value for all of Tegna’s shareholders.”
Standard Media is also buying 15 AM and FM stations in Lafayette, Ind.; Olean, N.Y.-Bradford, Pa.; and Corning-Elmira, N.Y.