JHVEPhoto/iStock Editorial via Getty Images Situation Overview On Friday after the market closed, the FCC issued a Hearing Designation Order related to the proposed acquisition of Tegna (NYSE: TGNA ) by Standard General. The FCC’s decision is based on the two main issues of retransmission rate increase and local news job cuts, despite Standard General’s assurances to the contrary. While the FCC has not completely blocked the deal, the Hearing Designation Order requires the parties to present their case in front of an Administrative Law Judge, although a date has not been specified. This approach is often used by the FCC to effectively halt a deal, as the uncertainty surrounding the timeline can be a deterrent for both parties, particularly in light of the accruing daily ticking fee. Tegna and Standard General may choose to extend the outside date of the deal, though this has not been confirmed. In my view, the most likely outcome is that Tegna and Standard General will decide to terminate the proposed transaction. Since the FCC issued a Hearing Designation Order, Tegna has the right to terminate the deal and collect a $136 million termination fee, which is what I anticipate will happen. For […]
TEGNA: An Arbitrager’s Nightmare Is A Fundamental Investor’s Opportunity
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