Tegna Inc announced yesterday that its tentative $8.6 billion merger agreement with private equity firm Standard General won’t be happening. Negotiations have been in the works since last year as Tegna faced massive amounts of debt and the companies anticipated finalizing the deal before 2022 ended. A final deadline for negotiations was scheduled for March 22nd, and as the day ended, so did the deal.
Unfortunately, the Federal Communications Commission (FCC) held a hearing in February as several Congress members were against the merger, citing “material concerns in the record related to how the proposed transaction could artificially raise prices for consumers and result in job losses.”
Standard General sued the FCC in March of 2023 and Tegna also filed a formal application with the commission requesting a review of the (then) pending acquisition. Standard General released a statement at the time saying:
“As we have said for months, the FCC Media Bureau’s decision to designate the applications for hearing was a deliberate move to kill the transaction rather than to assist in making a decision. At any point between now and May 22nd, the FCC has the ability to override the Media Bureau’s deeply flawed Hearing Designation Order and bring this deal to a vote. We urge the FCC to listen to the countless bipartisan voices calling for a vote and fair treatment of the applicants.”
Both companies agreed that unless the FCC scheduled a hearing before the end of the negotiation timeline the pause would “kill the deal before a ruling could be made.” The United States Court of Appeals of the District of Columbia Circut decided against hearing out Standard General’s lawsuit in court, cementing the dismal fate of this deal.
While the deal was pending, Tegna place a hold on share repurchases but has since resumed the program, estimated to be worth $300 million now that shares have increased 3 percent.
Now, because the deal is dead, Standard General will likely pay Tegna around $136 million in early termination fees.