Apollo Makes Another Approach to Tegna, Rivaling Gray Bid
Apollo offered Tegna $20 a share in cash after Gray offered $20 a share in cash, stock
Apollo first contacted Tegna roughly a year ago and expressed interest in a deal, but that approach didn’t lead to detailed talks.
PHOTO: ANDREW HARRER/BLOOMBERG NEWS
The private-equity firm offered $20 a share, the people said. Apollo— which closed a deal in December to acquire a majority stake in broadcaster Cox Media Group—first contacted Tegna roughly a year ago expressing interest in a deal, but that approach didn’t lead to detailed talks.
The latest offer comes after rival broadcaster Gray Television Inc. also made a $20-a-share offer for Tegna, though that offer was a mix of mostly cash and some stock, one of the people said. Gray had a market value of roughly $1.5 billion Friday after its stock slid more than 4% after Reuters reported on that offer.
The shares of local-TV operators including Tegna and Gray dropped precipitously in recent weeks on fears of a recession. Media stocks also were hit by expectations of decreased election advertising spending. Tegna shares temporarily traded at their lowest price in the past year on Thursday, but closed up 26% Friday.
Tegna is also being targeted by activist investor Standard General, which owns a roughly 9% stake in the company and in January nominated four candidates to the company’s board, setting up a proxy fight. Standard General nominated a fifth director candidate last month.
Standard General said in a statement Friday that it thinks Tegna’s board “needs to run a full and fair process to explore all alternatives to maximize value for all shareholders.”
Both Gray and Apollo would likely be required to divest stations under Federal Communications Commission rules, but potential divestitures could be more significant in a deal with Gray, the people said.
By bulking up, broadcasters can gain negotiating leverage with content owners, with cable and satellite companies for distribution and with advertisers.
Last year, Nexstar Media Group Inc. agreed to sell 19 stations to Tegna and E.W. Scripps Co. for a total of $1.32 billion and struck another deal in April to sell two Indianapolis stations to a smaller operator for $42.5 million. The deals were meant to clear the way for Nexstar’s $4.1 billion acquisition of Tribune Media Co.
Apollo would combine Tegna’s assets with those of Cox and Northwest Broadcasting, which the private-equity firm also acquired last year. Together, the deals would make Apollo one of the nation’s biggest owners of TV stations.
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