An affiliate of New York-based hedge fund Standard General has signed an agreement to acquire media company TEGNA, Inc. (NYSE: TGNA) for nearly $5.4 billion. The enterprise value of the deal stands at $8.6 billion, which includes the assumption of debt.
The offer of $24 per share represents a premium of around 39% to the TGNA stock’s closing price on September 14, 2021.
The Founding Partner of Standard General, Soo Kim, said, “We believe TEGNA has a strong foundation and exciting prospects for continued growth as a result of the stewardship of the Board and the current management team.”
Dave Lougee, the President and CEO of TEGNA, said, “This transaction is the next step in TEGNA’s evolution and recognizes the value of our portfolio of leading broadcast assets and innovative digital brands.”
Following the completion of the acquisition, Kim will become the Chairman of the Board of Directors and Deb McDermott will become the CEO. Currently, McDermott is the CEO of Standard Media.
Accepting the appointment, McDermott said, “TEGNA’s stations have earned excellent reputations as leading local content providers, and TEGNA’s digital and content assets are a key part of its future in an evolving media landscape.”
The transaction is expected to close in the second half of this year, after which Standard General’s Cox Media Group is likely to acquire TEGNA stations in Austin (KVUE), Dallas (WFAA and KMPX), and Houston (KHOU and KTBU).
Once the acquisition completes, TEGNA will become a private company and will not be listed on the New York Stock Exchange.
Headquartered in Virginia, TEGNA offers broadcast, digital media, and marketing services. It owns or operates 66 television stations in 54 markets.
Following the announcement on Tuesday, TGNA stock rose 7.1% to close at $22.44.
On February 23, James Goss from Barrington reiterated a Hold rating on the stock but did not provide a price target.
Last week, Wells Fargo (NYSE: WFC) analyst Steven Cahall maintained a Buy rating on TEGNA with a price target of $23 (2.5% upside potential).
Based on 1 Buy and 1 Hold, TGNA has a Moderate Buy consensus rating. The average TEGNA price target of $23 implies 2.5% upside potential from current levels. Shares have gained 43.1% over the past year.
Hedge Fund Activity
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in TEGNA is currently Very Positive as the cumulative change in holdings across all 11 hedge funds that were active in the last quarter was an increase of 5.1 million shares.
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