Standard General, a New York hedge-fund, has terminated its tentative $5.4 billion acquisition of Tysons TV Channel owner Tegna Inc.
Both sides had already extended the termination date a couple of times and set another deadline for May 22, but federal approval never materialized. The Federal Communications Commission, in February, one year after the announcement of the deal, asked its administrative courts to review the acquisition for "public interest concerns," a decision that was deemed by an analyst as "effectively killing the deal."
In a press release, Tegna announced Monday that Standard General owes it a termination fee of $136 million. Tegna announced that it would launch an accelerated $300 million share repurchase and increase its quarterly distribution by 20% to return capital back to its shareholders. In a press release, Tegna said that the share repurchase plan would be funded from the cash the company has on hand.
In a press release, Howard D. Elias said, "We are taking the initial step to immediately return a significant part of the excess capital that was accumulated while the Standard General transaction was pending."
In a recent article on Seeking Alpha Standard General CEO Soo Kim said that the hedge fund will have difficulty obtaining funding if the deadline of May 22 passes without FCC approval. He told reporters that May 22 was'midnight' for Cinderella.
Tegna CEO Dave Lougee made a statement saying, "I am very proud of my TEGNA colleagues who have remained focused on our business in spite of the distractions caused by a long-pending deal."
The company will hold an investor conference call on Thursday to discuss the first quarter's earnings. Tegna closed Monday's trading at $15.73, down 2.78 percent, but up 2.35% after hours.
Tegna is the owner of 64 TV stations in 51 U.S. cities, as well as multicast networks Twist Quest, and True Crime Network. Premion, a live streaming advertising company, is also owned by Tegna. The company reported $740 in revenue for the first quarter of 2023, which is a 4% decrease compared to the same period last year. The company's net profit for the first quarter of 2023 was $104million, down 22% from the same period last year.