Reuters: Gray Offers To Buy TEGNA


With TEGNA under pressure from major shareholder Standard General — the Soohyung Kim-led entity that has recruited former Tribune Media President of Broadcast Media Larry Wert as a nominee for a TEGNA board seat — a new wrinkle to its future has emerged.

According to “people familiar with the matter” who spoke to Reuters, Gray Television has submitted an offer to acquire TEGNA, the television broadcasting company formerly known as Gannett, for $8.5 billion.

“TEGNA’s policy is not to comment on market rumors,” a company spokesperson told RBR+TVBR.

Gray representatives did not immediately respond to RBR+TVBR‘s request for comment on Friday morning (3/6).

According to two sources, the bid involves a $20 per share cash/stock offer.

Gray as of 11:30am Eastern Friday was trading at $15.03 — off 4.6% from Thursday. It marks a fresh six-month low and a level last seen for GTN in December 2018.

The Reuters report notes “the pressure Gray and other companies” in the TV sector are under “to gain scale and more pricing power with advertisers and the major networks.”

It also noted to advertising revenue declines; this has been seen across the sector, with retransmission consent revenue increases helping to offset this trend.

How can Gray make the deal given the finances involved? Gray’s market capitalization is $1.6 billion, and Reuters notes the transaction would add to Gray’s “debt pile.” That said, the sources who spoke with Reuters believe Gray has a plan “to quickly pay down debt” should the offer be accepted by TEGNA.

TEGNA, meanwhile, has a market capitalization of $2.9 billion and $4.2 billion in debt.

TEGNA shares were up by 12.7% to $15.14 on the news. It helps the company return to pricing seen in November and ends a steep COVID-19 fueled dip that put shares at their lowest level in 13 months.

The Reuters report comes following a Feb. 26 pact that allows Gray Television to serve as a reseller of Premion’s services across Gray’s 93 television markets — something that gives credence to the Reuters story.

Adam R Jacobson reported on this story from San Luis Obispo, Calif.