Standard General, Apollo to pay $8.6 billion for Tegna
By Matt Collins Article may include affiliate links
Standard General has announced it has partnered with Apollo Global Management to acquire Tegna for around $8.6 billion.
Tegna, which owns 65 TV stations across the country, was formed in 2015 when Gannett decided to split its television and broadcast assets, the later of which also includes two radio stations.
Under that transaction, “old Gannett” technically became Tegna, while the company focus on newspaper publishing that took on the Gannett name was “new.”
Standard General and Apollo will pay $24 a share for Tegna, according to Bloomberg.
Soo Kim, Standard General’s managing partner, is borrowing $8 billion to finance the purchase with Apollo loaning $450 million at a 14% interest rate to get to the total purchase price. Another $230 million will also be provided at a lower interest rate.
Apollo already owns Cox Media, which has 33 stations, and part of the transaction calls for Apollo to buy three stations from Kim. It will then shift ownership of its Boston Fox affiliate WFXT into the holding company that will buy the Tegna stations.
The complicated deal also includes a $250 million break up fee due to Tegna if the deal is blocked by regulators.
The buyout is likely to face scrutiny from the FCC, because the combined station count between the two companies would reach significantly more than 39% of U.S. households, which is the limit that a single company can own.
However, it’s expected that the companies will argue that the rule shouldn’t apply in this case because, assuming the deal closes as structured now, Cox and Tegna would be separate entities and that neither Cox nor its owner, Apollo, will own any equity in Tegna.
Tegna will sell the stations it currently owns in Austin, Dallas and Houston to Apollo under the Cox umbrella.
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