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Tegna plots future after collapse of Standard General buyout

Tim Baysinger
May 25, 2023

Photo: Andrew Harrer/Bloomberg via Getty Images

Tegna took its first steps toward a future as a standalone company on Thursday morning by trying to assuage investors that it's well-positioned to ramp up investment again.

Why it matters: The collapse of its $5.4 billion buyout by Standard General means that the local broadcaster now has to go it alone unless another buyer emerges.

The big picture: Tegna has been the subject of buyout rumors since 2017, but the FCC's moves that killed the deal have left many in the industry at a loss for words about its view toward broadcast M&A.

  • "Nobody really knows what the FCC was thinking," CEO Dave Lougee said during an earnings call with analysts — the company's first since November 2021.
  • "I think for the entire industry, people don't really know what to make of it," he continued. "I really don't have a view on what their future view will be of deals."
  • Lougee demurred when pressed on if Tegna will seek a buyer again, saying that "our laser focus is on running this as a standalone company" but would look at any deal if it made sense.

Details: With the deal falling through, Tegna is entitled to a termination fee of $136 million from Standard General.

  • To pay the fee, Tegna said Thursday morning it has entered into an agreement with Standard General to accept Tegna common shares equivalent to the fee at market-based pricing.
  • Tegna expects to complete that transaction "promptly," Lougee said.
  • Additionally, Tegna expects to authorize a share repurchase program of up to $300 million of its common stock by the third quarter.

Of note: Despite the plans to increase investment in its business, Lougee clarified that it doesn't mean the company will go on a spending spree.

  • "I also don't want to imply that we're now coming out of the chute and ready to go buy a bunch of things."

The bottom line: "Armed with the knowledge of this possible outcome in recent months, our board of directors and senior management have been very focused on our standalone plan," Lougee said.

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