According to a report in the New York Post yesterday, station group Tegna is close to inking a $9 billion deal to be acquired by equity investors Standard General and Apollo Global Management. However, the deal could face the hurdle of a lengthy regulatory approval process that could end up scuttling it.
That’s because Tegna reportedly wants an approximately $500 million “break up” fee if the transaction is not approved within 12 months, regardless of whether a deal is finalized or not, the Post said. However, according to one one insider, the station group may have backed off on that demand in the last few days and “now it is only about price,” the source said.
Considering that there’s a share gap on price, Standard General and Apollo might have to pay $24 a share for Tegna, according to the Post, which quoted sources saying that the two companies are open to the idea of raising the offer again.
In addition to lengthy approval time, there’s also the question of whether the deal runs afoul of antitrust rules. Apollo owns 33 TV stations as part of the Cox Media Group and when combined with Tegna’s 64 TV stations and 2 radio stations, the combined number would exceed FCC rules that no one company can own TV stations that reach more than 39% of U.S. TV households.
