Customary Normal and Apollo are closing in on a doable $9 billion deal for Tegna, sources conversant in the matter advised The Put up.
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Customary Normal and Apollo World Administration are closing in on a roughly $9 billion deal for tv station proprietor Tegna, sources near the state of affairs advised The Put up.
The patrons and Tegna have cleared what sources noticed as the foremost stumbling block: how a lot the Customary Normal-Apollo workforce would want to pay if the deal takes greater than a 12 months to clear the Federal Communications Fee and different regulators.
Tegna had wished a roughly $500 million break-up price if the deal isn’t accomplished one 12 months after it's inked — even when regulators weren’t the reason for a doable no-deal.
However the TV big in latest days has largely relented on that time, sources mentioned. “Now it's only about worth,” a supply with data of the state of affairs mentioned.
The FCC presently has solely 4 commissioners, as an alternative of the conventional 5, making a deadlocked fee a chance.
In the meantime, there's nonetheless a $1 or $2 a share hole on worth, so there’s nonetheless solely a 50-50 probability a deal will get signed, a supply near the matter mentioned. However a month in the past the possibilities of a deal taking place have been probably nearer to twenty %, the supply mentioned.
Customary Normal and Apollo will probably must pay a minimum of $24 a share for Tegna, sources mentioned, after beforehand bidding $22.65. The patrons appear open to elevating their provide for the second time, sources mentioned.
Tegna’s shares have steadily risen based mostly on market hypothesis during the last 5 buying and selling days from $18.69 to $19.28 on Tuesday afternoon.
The primary query hovering over the potential deal is whether or not a Customary Normal-Apollo bid can stand up to antitrust scrutiny. The FCC’s nationwide media possession rule prohibits any entity from proudly owning industrial tv stations that attain greater than 39 % of US tv households nationwide.
Tegna’s stations mixed with those who Apollo already owns would surpass that mark. Apollo plans although to maintain all however one in every of its present stations separate from a brand new Tegna. Apollo would solely be a minority proprietor within the new Tegna, sources mentioned.
Apollo owns 33 tv stations as a part of its Cox Media Group. Cox Media Group general says it reaches 52 million households. Tegna, spun off from newspaper big Gannett in 2015, operates 64 tv and two radio stations throughout 54 US markets.
There could be overlap if one thought-about Cox and Tegna the identical entity.
Apollo’s Cox, for instance, owns the ABC affiliate in Atlanta. Tegna additionally owns the NBC affiliate there, so the FCC would want to get snug with a Customary Normal-owned Tegna — wherein Apollo owns a stake — and the competition that it could be run actually individually from Cox, a supply mentioned.
The Apollo stations cost higher-than-average retransmission charges to cable operators, and even when Apollo solely contributes the one station to Tegna, then Tegna can cost greater retransmission charges for all its stations. Business follow is a station proprietor expenses the best price to all cable firms.
A Tegna spokesman declined remark.
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