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Tegna Bidders Withdrew as COVID-19 Crisis Grew

Tegna on Sunday had received four unsolicited acquisition proposals but said that the COVID-19 crisis has shut down the discussions it was having.

The broadcaster did not identify the bidders, but reported bidders include Gray Television, Apollo Global Management and Byron Allen’s company.

Tegna said that it engaged with two of the bidders and provided them with extensive non-public due diligence information. After the COVID-19 pandemic disrupted the stock market, both of those bidders told Tegna they were ceasing discussions.

Related: Standard General Files Tegna Proxy statement

The other two parties have not signed confidentiality agreements, have not gotten the non-public information and did not provide information about financing sources.

Tegna said it did not intend to update Sunday’s disclosure.

“In addition to our focus on executing our standalone plan, the Tegna board and management have meaningfully engaged with third parties to explore opportunities to create value. The board has been, and remains, willing to consider transactions that create compelling value, and our focus now is on helping management navigate through an unprecedented environment,” said Howard Elias, chairman of the Tegna board.

“Like every other company, Tegna is operating in uncharted waters due to COVID-19 as we focus on ensuring the health and safety of our employees while continuing to create and preserve value,” said CEO Dave Lougee. “High-quality local news has never been more important, and we are fortunate to have significant contractual subscription revenues and a strong balance sheet with minimal near-term debt maturities. We are working through the current challenges raised by COVID-19 and are very confident that our long-term growth drivers remain intact.”

Tegna is also facing a proxy challenge from activist investor Standard General, which owns about 9% of Tegna stock and is seeking five seats on Tegna's board.

“We understand that Tegna’s process has stalled because, amid a global emergency and capital markets dislocation, this board has created arbitrary deadlines and unnecessary preconditions," said Soo Kim,  founding partner of Standard General.

"By their own admission, the company has been unwilling to provide access to information unless suitors first demonstrate certainty of financing. This approach would be off market in any deal environment, and particularly so under current market conditions. The Board’s actions appear designed to end this process before it can even begin in earnest," he said.

"This is just the latest in a troubling pattern of behavior. It should never have come to this, and shareholders need to hold this Board accountable," Kim said.

Jon Lafayette
Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.