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Tegna (TGNA) Agrees to be Taken Over by Standard General

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Tegna Inc. (TGNA - Free Report) has entered into a definitive agreement to be acquired by an affiliate of Standard General and become a private company.

Per the deal, Tegna will be acquired by Standard General affiliate for $24 per share in cash.

The transaction, which was unanimously approved by the Tegna Board, has an equity value of around $5.4 billion and an enterprise value of $8.6 billion, including the assumption of debt.

With the acquisition in place, Tegna will become the United States’ largest minority-owned broadcast group.

Shares of this Zacks Rank #3 (Hold) company are up 43.3% in the past year compared with the Zacks Broadcast Radio and Television industry’s rise of 43.3% and the Consumer Discretionary sector’s return of 25.5% in the past year.

The transaction is expected to close in the second half of 2022, subject to approval by Tegna shareholders, regulatory approvals and other customary closing conditions.

TEGNA Inc. Price and Consensus

 

TEGNA Inc. Price and Consensus

TEGNA Inc. price-consensus-chart | TEGNA Inc. Quote

 

TEGNA’s Prospects Attracted Suitors

TEGNA has been attracting acquisition proposals due to its prospects. The company benefits from accretive acquisitions, consistent spike in subscription revenues and resurgence in advertising revenues. The company benefits from a stable subscriber base and higher rates.

TEGNA’s buyouts of local TV stations that comprise the Big Four affiliates along with aggressive spending on political ads are likely to aid the top line. Moreover, higher streaming consumption is driving demand for Premion, TEGNA’s OTT advertising solution.

In March 2020, Tegna received four unsolicited acquisition proposals. However, the proposals fell through due to the coronavirus-induced market dislocation.

Standard General, the fourth-largest shareholder of Tegna, has been pushing for a change at the company. The shareholder had been demanding a change in Tegna, arguing that the current leadership oversaw a series of bad decisions, including failing to find a buyer.

Standard General failed to revamp Tegna’s board in both 2020 and 2021.
In the third quarter of 2021, Tegna confirmed that it had received acquisition proposals yet again.

Per Bloomberg, Tegna had received acquisition bids of more than $8 billion from Apollo Global Management Inc. (APO - Free Report) and media personality Byron Allen.

Apollo Global Management had teamed up with Standard General and made an all-cash offer of approximately $22 per share.

Byron Allen teamed up with Ares Management Corp., offering $23 per share.

Stocks to Consider

Two better-ranked stocks in the Zacks Consumer Discretionary sector are PlayAGS (AGS - Free Report) and Accel Entertainment (ACEL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PlayAGS is set to announce fourth-quarter 2021 results on Mar 10.

AGS is down 6.6% in the past year against the Zacks Gaming industry’s decline of 35.3% and the Consumer Discretionary sector’s fall of 24.7% in the past year.

Accel Entertainment is set to announce fourth-quarter 2021 results on Mar 15.

ACEL is up 28.3% in the past year against the Zacks Gaming industry’s decline of 28.9% and the Consumer Discretionary sector’s fall of 21.3%.