Signaling ongoing consolidation of the broadcast business, Gray Television has made an $8.5 billion bid for larger rival Tegna, according to Reuters, sending Tegna stock up by more than 30% in premarket trading Friday in what looks set to be an otherwise down market.
Gray offered about $20 a share in cash and stock for Tegna, according to sources familiar with the situation, Reuters said.
A deal, which is not assured by any means, would follow Nextstar Media Group’s $7.2 billion acquisition of Tribune Media.
Tegna is the name given to Gannett’s broadcast and digital business when it was spun off from the publishing assets. It owns 52 stations in 61 market and covers 39% of the country. Gray, based in Atlanta, cover 24% of the country in 93 markets.
Last week, the companies announced a strategic partnership with Gray acquiring a minority stake in Premion, Tegna’s Connecticut OTT ad business.
Reps from Gray weren’t immediately available for comment. A spokesman for Tegna said, “Tegna’s policy is not to comment on market rumors.”
Gray, with a market capitalization of $1.9 billion, would attempting to swallow a larger company with a market cap of $2.9 billion. Gray’s shares were also trading higher in early trading, up 6.4%.
Broadcasters have been merging at a frantic pace over the past several years to achieve scale and clout with advertisers in a highly competitive and fast changing television landscape.