Apollo Global Management has made no secret of its interest in purchasing the TV and radio assets of broadcasting company Tegna. The private-equity firm is looking to bulk up its ownership of TV stations, and first contacted Tegna about a potential deal at the beginning of the year, then with a letter to its board in February. It has since remained in contact.
The publicly held Tegna is now acknowledging that yes, it has been twice approached by Apollo. In a succinct release, the Tysons Corner, VA-based company said Wednesday that it confirms receiving the February letter “stating that Apollo was interested in acquiring Tegna without specifying a price.” Subsequently, in June 2019, the company writes, “Apollo made a different proposal, to combine Tegna with broadcasting assets Apollo is in the process of buying, in a transaction that would not have constituted a change of control of Tegna.” And then it states: “Tegna does not intend to update this disclosure.”
As Inside Radio reported earlier this week, based on a Wall Street Journal story, Apollo has said it would also consider merging its stations with Tegna or selling them to the company. Of course, Apollo made headlines with the announced purchases of Cox Media Group’s TV stations in February and its radio properties in June.
As Apollo aims to build one of the country’s largest TV groups, it also struck a deal this year to acquire 20 TV stations owned by Northwest Broadcasting, which would also be then merged into the larger TV-station group. “Together, the deals would quickly make Apollo one of the nation’s biggest owners of local TV stations,” according to The Wall Street Journal. Tegna, meanwhile, has a market value of about $3 billion, and its shares are up about 38% this year, the newspaper says.
The Journal also explained the strategy behind growing a TV portfolio: “By getting bigger, broadcasters can gain leverage when negotiating with content owners, with cable and satellite companies for distribution and with advertisers. Station owners are also responding to the consolidation happening in the entertainment and distribution businesses. In March, Walt Disney Co. closed a deal to acquire the majority of 21st Century Fox Inc.’s entertainment assets and last year AT&T Inc. acquired Time Warner.”
With 51 TV stations, Tegna reaches just over 35% of U.S. TV households. That doesn’t include the 11 stations it has agreed to acquire from Nexstar. If Apollo buys Tegna and closes all of its other deals, it will own 85 stations, or nearly 100 including the Nexstar stations that Tegna has agreed to buy. Tegna also owns four radio stations in San Diego and Columbus, OH.