After a contentious proxy fight, local TV station owner Tegna Inc. will sell to its largest stockholder Standard General in a $5.4 billion cash deal. The takeover will include the assumption of debt, increasing the total value of the sale to about $8.6 billion.
Conflict has been brewing since the hedge fund’s chief, Soo Kim, tried to gain seats on Tegna’s board and accused its leadership of racially motivated bias. Apollo Global Management is financing the deal after making a failed attempt in 2020 to buy the broadcaster itself.
Tegna owns 64 stations in 51 markets and is the largest independent owner of NBC affiliates. Standard General, a 15-year-old firm that manages capital for public and private pension plans, endowments, foundations, and high-net worth individuals, invests in distressed and undervalued companies.
In SEC filings prior to the deal, Standard General maligned Tegna’s profitability, claiming that while it had twice the number of employees per station than its competitors, it took in less revenue. Tegna issued a reply in a company report, producing profitability figures that refuted Standard General’s statement.
Tegna owns TV stations in consequential growth markets including Atlanta, Denver, Dallas, Seattle, Washington, D.C., Tampa, Charlotte, and Minneapolis. Its new owner intends to sell off its Texas stations to Cox Media Group, which its partner in the deal, Apollo, owns. Apollo is a management company with $498 billion in assets. Cox currently owns 33 stations in 33 markets.
Standard General is also the largest shareholder in the casino company, Bally’s, and has a relationship with Sinclair Broadcasting. In 2020, Sinclair agreed to rename its Regional Sports Network, Bally’s Sports Regional Network, in an $85 million deal.
The Federal Communications Commission will examine the deal, given the proposed ownership of key stations in major markets by both Standard General and Cox and the enmeshed relationship among the two companies and Apollo. Standard General would have all decision-making and voting power for the company, according to the arrangement.