Standard General agreed to acquire KING 5 owner Tegna for $5.4 billion, consummating a yearslong takeover saga for the television broadcaster.
The investment firm agreed to pay $24 a share in cash, 39% above Tegna’s Sept. 14 closing price, before media accounts about a possible sale. The deal is expected to close in the second half, according to a statement Tuesday that confirmed a Bloomberg News report. The companies valued the deal at about $8.6 billion, including the assumption of debt.
“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,” Soo Kim, founding partner at Standard General, said in the statement.
In the Northwest, Tegna owns many of the media outlets formerly operated by King Broadcasting Co. In addition to KING and its sister station KONG, Tegna operates KREM 2 and KSKN 22 in Spokane, KGW 8 in Portland and KTVB 7 in Boise, Idaho.
In a nod to potential antitrust scrutiny of the purchase, the buyers agreed to pay more if the closing takes longer than expected. The price increases incrementally from 5 cents a share per month after the first nine months, to 12.5 cents in the 14th and 15th months.
Apollo Global Management will receive securities in Tegna and won’t have voting rights. After the close, Tegna stations in Austin, Dallas and Houston, Texas, will be acquired by Cox Media Group.
Standard General and Apollo had previously offered about $22 a share for Tegna, Bloomberg News reported in September. That bid was later bumped to $22.65 and then to $24, people familiar with the matter said. Their rivals included media mogul Byron Allen, who had teamed up with Ares Management Corp. last year to offer $23 a share.
The agreement follows years of pursuit of Tegna, which owns 64 news stations throughout the U.S. as well as media properties such as the True Crime Network, according to its website. Apollo had been in talks to acquire the company two years ago, but ended discussions as the early days of the COVID-19 pandemic upended markets.
Negotiations were rebooted last year, and the parties have been haggling over issues including Tegna’s concerns that regulators would nix any sale given Apollo’s ownership stake in competitor Cox Media Group, Bloomberg News has reported. Cox Media Group owns KIRO 7 in Seattle, as well as stations in Spokane, Yakima and the Tri-Cities.
New York-based Standard General, which was founded in 2007 by Soo Kim, primarily manages event-driven funds, but it has made acquisitions. In 2015, it bought more than 1,740 Radio Shack stores through General Wireless, as well the Radio Shack brand in an auction related to its bankruptcy.
Standard General has run two unsuccessful boardroom battles at Tegna in recent years, arguing in both cases that the company was underperforming and in need of a shake-up.
After the close of the Tegna transaction, Kim will serve as chair and Deb McDermott, who runs Standard Media, will become CEO.