Local TV station giant Tegna is being acquired by a Standard General L.P. affiliate for $24 per share in cash. The deal has an equity value of approximately $5.4 billion and an enterprise value of about $8.6 billion when including the assumption of debt.
The transaction represents a premium of roughly 39% to Tegna’s unaffected closing share price on Sept. 14, 2021, which was the last full trading day prior to media speculation about a potential sale. It represents a premium of approximately 11% to Tegna’s all-time high closing price since separating from the Gannett publishing business in 2015.
The transaction was unanimously approved by the Tegna Board. It is now subject to approval by Tegna shareholders, regulatory approvals, and other customary closing conditions, and is expected to close in the second half of 2022.
Following the close of the transaction, 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. Tegna will become a private company when the deal is done.
Standard General L.P. is a New York-based investment firm founded in 2007 by Soohyung “Soo” Kim and Nicholas Singer, with seed capital from Reservoir Capital Group. Kim, who has been the private-equity firm’s managing partner and chief investment officer since 2013, will become chairman of Tegna’s new board, replacing Howard D. Elias.
Deb McDermott, who is Standard Media’s CEO, will become chief executive officer of the private Tegna company.
“We are pleased to have reached this agreement with Standard General, which follows a thorough review of acquisition proposals received by the company. After evaluating this opportunity against Tegna’s standalone prospects and other strategic alternatives, our Board concluded that this transaction maximizes value for Tegna shareholders,” Elias said in a statement on Tuesday. “Thanks to the team’s stellar execution of the company’s value-creation strategy, Tegna has positioned itself as a leading broadcast television group serving the greater good of the communities in which we operate – and as a private company will have an enhanced ability to keep evolving its local news, programming, and marketing solutions to serve its communities in a rapidly changing media landscape.”
“As long-term investors in the television broadcasting industry, we have a deep admiration for Tegna and the stations it operates and, in particular, for Tegna’s talented employees and their commitment to serving their communities,” Kim added. “We are excited to partner again with Deb McDermott, who previously spearheaded the broadcast group at Media General, where Standard General was a principal shareholder.”
“We believe Tegna has a strong foundation and exciting prospects for continued growth as a result of the stewardship of the board and the current management team,” Kim continued. “We look forward to building on the company’s strong foundation and leveraging Deb’s deep industry experience to drive further growth.”
“I am honored to lead Tegna’s team to create new opportunities and build on its heritage and successes achieved under Dave’s leadership,” McDermott said. “Tegna’s stations have earned excellent reputations as leading local content providers, and Tegna’s digital and content assets are a key part of its future in an evolving media landscape. These achievements are a credit to the hard work of Tegna’s dedicated employees, who are the company’s most valuable asset. I’m very excited about what the future holds for Tegna.”
“This transaction is the next step in Tegna’s evolution and recognizes the value of our portfolio of leading broadcast assets and innovative digital brands,” Dave Lougee, the current president and CEO of Tegna, said. “Tegna’s employees deserve tremendous credit for their commitment to serving our viewers with high-quality news and content that informs and supports our local communities. At all levels, we have been tireless in our efforts to ensure Tegna effectively serves all of our stakeholders, and I am immensely proud of these efforts.”
“Our hard work has built a company that is a leading and trusted local news and media content provider in the markets it serves and has fostered a culture of diversity and inclusiveness. We are deeply gratified that Tegna’s new owners value and embrace our purpose to serve the greater good of our communities,” he continued. “Deb McDermott is an experienced and accomplished broadcast executive, and we are confident in Tegna’s future under her leadership.”
