Hedge fund Standard General L.P. announced Feb. 22 an $8.6 billion deal to buy Tegna Inc., operator of 64 U.S. television stations, including two in Jacksonville.
The long-rumored deal includes an investment by funds managed by Apollo Global Management, which controls two other Jacksonville stations through its majority ownership of Cox Media Group.
That could raise regulatory issues because of Federal Communications Commission rules that limit the number of stations an owner can operate in one market.
Tegna did not immediately respond to email and phone messages about the regulatory issues.
Tegna, formerly known as Gannett, has owned two Jacksonville stations for more than two decades.
The company bought NBC affiliate WTLV TV-12 in 1987 and added ABC affiliate WJXX TV-25 in 2000.
Tegna announced the WJXX deal in November 1999 one day after the FCC implemented new rules that allow companies to own a second station in one market.
Apollo acquired a majority interest in Cox Media in 2019.
Cox operates Fox affiliate WFOX TV-30 and CBS affiliate WJAX TV-47, two stations that have been operated together since 1995. FCC rules at that time allowed station owners to operate, but not own, a second station under a shared services agreement.
The stations have been sold three times since then but even though the FCC rules changed, the buyers were not allowed to own both stations outright because of restrictions on owning stations ranked in the top four in one market.
Apollo, through Cox, owns WFOX, while WJAX is owned separately by a former Cox executive. Cox provides programming, sales and other operations services under the agreement.
Standard General agreed to pay $24 per share in cash to buy Tegna, a total of $5.4 billion. The assumption of debt makes the total value of the deal $8.6 billion.
Standard General will hold all voting shares of Tegna, which will become a private company after the buyout. Apollo and Cox Media will acquire non-voting shares of Tegna, which may allow them to avoid FCC ownership issues.
“This transaction is the next step in Tegna’s evolution and recognizes the value of our portfolio of leading broadcast assets and innovative digital brands,” Tegna CEO Dave Lougee said in a news release.
The companies said the $24-a-share price represents a 39% premium to Tegna’s closing price on Sept. 14, when media speculation about the buyout began.
“We are pleased to have reached this agreement with Standard General, which follows a thorough review of acquisition proposals received by the Company. After evaluating this opportunity against Tegna’s standalone prospects and other strategic alternatives, our Board concluded that this transaction maximizes value for Tegna shareholders,” Tegna Chairman Howard Elias said in the release.
The companies hope to close the transaction in the second half of this year.