The Allen Media Group, which is owned by Byron Allen, has submitted an all-cash offer to acquire Tegna, the station group that has received at least two previous bids over the course of the past week.
Tegna is estimated to be worth $8.5 billion, which accounts for more than $4 billion in debt held by Tegna, based on the price that Allen is rumored to have offered each share, which is $20.
That falls within the range of the offers that were made by Apollo Global Management, a private equity powerhouse, and Gray Television, a television station based in Atlanta.
The offer made by Gray consists of both cash and shares, which makes it less appealing during this period of heightened volatility in the equity markets.
Late on Wednesday, attempts to contact a representative of Allen that was seeking comment were unsuccessful. A representative for Tegna stated that the company does not comment on market speculations as it is against company policy.
Following the completion of transactions to acquire USA Television and Bayou City Broadcasting, Allen has committed over $500 million to the purchase of television stations over the course of the past six months.
This earned him 15 stations in relatively unimportant markets. Allen stated in February that he was willing to spend up to $10 billion in order to transform Allen Media Group into one of the most successful station groups in the country.
In an industry that has been seeing tremendous consolidation over the course of the previous decade, Tegna is one of the final major prizes that could be acquired.
The majority of the company’s 62 Big Four network affiliates are ranked among the top 50 in their respective markets.
Tegna’s management has also been subjected to pressure from activist shareholder Soo Kim of Standard General. Mr. Kim has criticized the current management regime, which is led by longtime president and CEO Dave Lougee and has urged the company to consider M&A opportunities as one of his criticisms.
Standard General has proposed a new slate consisting of five individuals to serve as directors on the Tegna board.
Allen’s camp believes that there is potential for them to connect their client’s existing Tegna stations business with their Entertainment Studios company.
Entertainment Studios is a media conglomerate that owns and manages ten cable channels, one of which is the Weather Channel.
In addition, the company produces a variety of shows both for its own cable channels and for syndication on broadcast television.
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