Media entrepreneur Byron Allen has made an all-cash bid for Tegna and is said to be one of three potential buyers circling the Tysons, Va.-based broadcaster, according to a source familiar with the situation.
Allen’s Allen Media Group offered $20 a share, or about $8.5 billion, the source said. It is going up against Gray Television, which last week made a offer, also for $20 a share but in a combination of cash and stock.
Private equity firm Apollo Global Management, which recently acquired stations from Cox, also made a bid for $20 a share, said a source familiar with the situation.
An Apollo spokesperson wasn’t immediately available to comment.
A spokesman for Tegna said, “Tegna’s policy is not to comment on market rumors.”
Standard General, one of the largest shareholders of TEGNA Inc. (NYSE: TGNA), and the owner of approximately 9.7% of the Company’s outstanding shares, today issued the following statement regarding media reports that TEGNA has received multiple potential acquisition offers for the Company:
One of Tegna’s largest shareholders, New York fund manager Standard General, urged the broadcaster to evaluate the offers.
Soo Kim, Founding Partner of Standard General L.P., said,
“We understand from media reports that TEGNA has received multiple offers from credible buyers. We believe that the Tegna Board, with the assistance of independent advisors, needs to run a full and fair process to explore all alternatives to maximize value for all shareholders,” said Soo Kim, Standard General’s founding partner. “We also understand that these proposals involve both cash and stock and all cash offers, and it is essential that the Tegna Board carefully evaluate the benefits and risks of all available alternatives. We stand ready to work with Tegna to help thoughtfully evaluate these proposals.”
Allen’s offer represents a significant premium to the current price of Tegna shares, which have been buffeted like other media stocks (and just about all stocks) by the market’s recent slump. Tegna closed down 8% Wednesday at $16.02. The volatility, due to deepening fears of the coronavirus pandemic, may make an all-cash offer particularly attractive.
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 markets, including a preponderance of big-four network affiliates in many of the largest. It covers 39% of the country.
Gray Television appears to have to put the company in play. Reports of Its bid boosted Tegna shares by 30% in one session.
Allen Media currently owns 15 television stations in 11 markets. It acquired most of them last month from USA TV for $305 million and said then that it planned to invest some $10 billion to acquire ABC, CBS, NBC and Fox television stations over the next three years to become of the largest broadcast television groups in America.
The company owns a handful of cable networks, including the Weather Channel, digital news site The Grio, and film and television production under Entertainment Studios.
Allen personally partnered with Sinclair to acquire the Fox Regional Sports Networks from Disney in a deal worth $10.6 billion.