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Gray Television pulled its takeover offer for local broadcaster Tegna due to market volatility, per Reuters. Rival bids from Apollo Global Management and Byron Allen appear to still be on the table, as is a new joint approach from private equity firm Najafi Cos. and privately held religious broadcaster Trinity Broadcasting Network.
Why it matters: It reflects how the M&A hierarchy has momentarily flipped, with listed strategics no longer having the built-in advantage of cheaper currency (i.e., their own stock).
Caveat: Private equity remains reliant on the leveraged financing market, which appears to be tightening.
Pricing: Offers from Gray, Apollo, and Byron Allen each reportedly are for $20 per share, which would value Tegna at around $8.5 billion (including assumed debt). Tegna shares closed yesterday at $15.08.
The bottom line: "Tegna, the former TV-station arm of Gannett Co., was spun off in 2015 and retained the old Gannett’s trading history. It has about 60 TV stations in 51 U.S. markets, reaching about 38% of U.S. households." — Bloomberg