Soo Kim’s Standard General introduced a posh deal on Tuesday with Apollo Global Management to purchase TV station proprietor Tegna for $24 a share, or roughly $8.7 billion.
Tegna — spun off from newspaper large Gannett in 2015 as a separate, publicly traded company — operates 64 TV and a pair of radio stations throughout 54 US markets.
Kim plans to change Tegna’s CEO David Lougee — who Kim had accused of getting a historical past of sexual discrimination and racial bias — with former Media General CEO Deb McDermott, Standard General stated in a Tuesday launch.
The Post reported Jan. 18 that Standard General was closing in on an acquisition and had cleared a serious stumbling block with Tegna over the breakup charge.
To get the deal executed, Kim has entered into an costly partnership with Apollo Global Management which had bid a number of instances in recent times to buy Tegna.
Apollo, which owns the Cox Media Group and its 33 tv stations, is shopping for Kim’s three mid-market TV stations. Cox is then contributing its Boston station, Fox affiliate WFXT, to the holding company that’s shopping for Tegna, sources stated.
Cox fees higher-than-average retransmission charges to cable operators. Tegna even by simply proudly owning one Cox station can cost increased retransmission charges for all its stations. Industry follow is a station proprietor fees the best rate to all cable corporations.
The question now’s if the Federal Communications Commission will clear the deal as the mix of Cox and Tegna would clearly surpass the FCC’s nationwide media possession rule prohibiting any entity from proudly owning business tv stations that attain greater than 39 p.c of US tv households nationwide.
Kim will argue that Cox and Tegna are separate since neither Cox nor Apollo will personal any fairness curiosity in Tegna.
Overall, Kim is borrowing $8 billion to finance the extremely leveraged buyout, a supply stated.
Apollo is loaning $450 million in junior debt at a 14 p.c curiosity rate to fund the Tegna buyout that rises over time. The non-public fairness agency can also be offering one other $230 million extra senior mortgage at a decrease rate, a supply stated.
Kim’s Standard General has agreed to pay a few $250 million break-up charge to Tegna if the deal is blocked, sources stated. Tegna had initially requested for double that quantity, sources stated.
Under phrases of the deal, Standard General pays an additional 5 cents per share a month after 9 months if the deal doesn’t shut by that point after which 12.5 cents per share within the fifteenth month and past, sources stated.
Bloomberg on Monday reported that Standard General was nearing a $24 a share deal.
Ares Management that had lately been working with Byron Allen to bid for Tegna is offering Kim with a few $460 million mortgage to fund the deal, a supply stated.
Kim, president of the alumni affiliation of New York’s prestigious Stuyvesant High School, is probably greatest identified for as soon as being Dov Charney’s money man and shopping for a bankrupt Radio Shack. He additionally controls Bally’s that has grown into being an internet sports activities betting presence.
One of his main focuses in recent times has been being a Tegna shareholder activist. Before clashing with CEO Lougee final May in what was a nasty and unsuccessful proxy battle, he had additionally lost a 2020 proxy battle in opposition to Tegna.
Kim final summer season signed a standstill settlement by which he agreed not to launch one other proxy battle for multiple year in alternate for getting an opportunity to conduct due diligence and buy Tegna.
Separately, Kim has a suggestion to buy the 80 p.c of Bally’s he doesn’t personal for $38 a share. Bally’s is contemplating his proposal and has not but responded to Kim.