Soo Kim's fund Normal Basic is anticipated to announce a deal early Tuesday to accumulate TV station proprietor Tegna for $8.7 billion.
SOPA Photos/LightRocket through Gett
Soo Kim’s Normal Basic introduced a posh deal on Tuesday with Apollo International Administration to accumulate TV station proprietor Tegna for $24 a share, or roughly $8.7 billion.
Tegna — spun off from newspaper big Gannett in 2015 as a separate, publicly traded firm — operates 64 TV and a pair of radio stations throughout 54 US markets.
Kim plans to exchange Tegna’s CEO David Lougee — who Kim had accused of getting a historical past of sexual discrimination and racial bias — with former Media Basic CEO Deb McDermott, Normal Basic stated in a Tuesday launch.
The Put up reported Jan. 18 that Normal Basic was closing in on an acquisition and had cleared a serious stumbling block with Tegna over the breakup payment.
To get the deal carried out, Kim has entered into an costly partnership with Apollo International Administration which had bid a number of instances lately to purchase Tegna.
Apollo, which owns the Cox Media Group and its 33 tv stations, is shopping for Kim’s three mid-market TV stations. Cox is then contributing its Boston station, Fox affiliate WFXT, to the holding firm that's shopping for Tegna, sources stated.
Cox costs higher-than-average retransmission charges to cable operators. Tegna even by simply proudly owning one Cox station can cost increased retransmission charges for all its stations. Business apply is a station proprietor costs the best price to all cable firms.
The query now could be if the Federal Communications Fee will clear the deal as the mix of Cox and Tegna would clearly surpass the FCC’s nationwide media possession rule prohibiting any entity from proudly owning industrial tv stations that attain greater than 39 % of US tv households nationwide.
Kim will argue that Cox and Tegna are separate since neither Cox nor Apollo will personal any fairness curiosity in Tegna.
Total, Kim is borrowing $8 billion to finance the extremely leveraged buyout, a supply stated.
Apollo is loaning $450 million in junior debt at a 14 % rate of interest to fund the Tegna buyout that rises over time. The non-public fairness agency can be offering one other $230 million extra senior mortgage at a decrease price, a supply stated.
Kim’s Normal Basic has agreed to pay a few $250 million break-up payment to Tegna if the deal is blocked, sources stated. Tegna had initially requested for double that quantity, sources stated.
Underneath phrases of the deal, Normal Basic pays an additional 5 cents per share a month after 9 months if the deal doesn't shut by that point after which 12.5 cents per share within the fifteenth month and past, sources stated.
Bloomberg on Monday reported that Normal Basic was nearing a $24 a share deal.
Ares Administration that had lately been working with Byron Allen to bid for Tegna is offering Kim with a few $460 million mortgage to fund the deal, a supply stated.
Kim, president of the alumni affiliation of New York’s prestigious Stuyvesant Excessive Faculty, is maybe finest identified for as soon as being Dov Charney’s cash man and shopping for a bankrupt Radio Shack. He additionally controls Bally’s that has grown into being a web based sports activities betting presence.
One in all his main focuses lately has been being a Tegna shareholder activist. Earlier than clashing with CEO Lougee final Might in what was a nasty and unsuccessful proxy combat, he had additionally misplaced a 2020 proxy combat towards Tegna.
Kim final summer season signed a standstill settlement wherein he agreed to not launch one other proxy combat for multiple yr in alternate for getting an opportunity to conduct due diligence and purchase Tegna.
Individually, Kim has a suggestion to purchase the 80 % of Bally’s he doesn't personal for $38 a share. Bally’s is contemplating his proposal and has not but responded to Kim.
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