In under 30 minutes’ time, weeks of lobbying and press statements designed to curry favor with TEGNA shareholders ultimately failed to generate enough support of a plan to seat Standard General founder Soohyung Kim and nominees selected by the investment firm on TEGNA’s Board of Directors.
Following the release of preliminary voting results, Standard General released a statement that thanked shareholders, regardless of the proxy card they voted for, while vowing to continue its efforts to bring more value to TEGNA.
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“Regardless of the card you voted, we appreciate our dialogue with you during this process, and we very much hope that will continue,” Standard General said. “It goes without saying that we always respect the will of all shareholders.”
The statement added that Standard General invested in the company formerly known as Gannett “because of our fundamental conviction that TEGNA should be the premier pure-play local affiliate TV broadcasting company.”
Standard General added that it chose to become more actively involved “after management failed to acknowledge reports of M&A interest.”
Further, “Signs of entrenchment and a lack of transparency are behaviors that will always raise concerns with Standard General.”
Even with the proxy card defeat on Thursday, Standard General is confident that it has already made “important contributions benefitting our fellow shareholders by challenging management’s narrative” about TEGNA’s performance and seeking transparency about its “numbers, acquisition metrics, and engagement with third parties.”
In fact, Standard General opines, “It may very well be the case that the pressure from our election contest is the reason investors learned of the broad interest of third parties in an acquisition of TEGNA at a premium valuation, and the reason that TEGNA finally agreed to engage with interested parties in early 2020.”
While Standard General and TEGNA engaged in an increasingly hostile war of words over the past several weeks, Standard General is now pitching a call for unity as the COVID-19 pandemic continues to highly impact media advertising revenue.
That said, Standard General couldn’t help but note that the election of its board nominees would have resulted TEGNA “joining the mere 1% of U.S. listed companies with a majority woman board,” and one that would have doubled the number of ethnic minorities from two to four on the 12-member board.
“At the appropriate time, we look forward to management providing clarity around its plan to restore and grow shareholder value, and we remind the company that it has not held a regular Analyst Day for investors since the middle of 2017,” Standard General said. “We are focused on long-term value creation, and we would welcome management providing shareholders with a compelling plan to deliver standalone value as an alternative to whatever outside strategic interest may return in the future.”
Standard General added that it is “very concerned” that TEGNA asked employees to take unpaid furloughs during the COVID-19 pandemic’s most critical time period. While “public peers” have not asked their frontline staff to bear such burdens, TEGNA states, it did not note how many radio broadcasting companies have drastically reduced their employee payroll due to the novel coronavirus.
“Our fundamental belief in TEGNA remains: that TEGNA should be the premier pure-play local affiliate broadcasting company, for the benefit of all stakeholders: its staff, who are the Company’s heart and soul, the local communities that depend on TEGNA for vital and trusted news, and all of us shareholders,” Standard General’s statement concluded. “We want TEGNA to succeed, and we will continue to work to make TEGNA the best company in local TV affiliate broadcasting.”