Nexstar to buy Tegna for US$3.5 billion in bet on FCC reforms
The all-cash takeover values Tegna at US$22 a share, the companies said in a statement on Tuesday (Aug 19). That's a 44 per cent premium to the company's stock price on Aug 8, when shares surged on reports that the two companies were in talks. Including debt and transaction fees, it values Tegna at US$6.2 billion.
The Trump administration has expressed a willingness to allow more consolidation in broadcast television. The industry has been battered by declining viewership and advertising as consumers drop conventional TV services in favour of digital platforms.
'Arbitrary limitations on local broadcast ownership can no longer make sense in today's media economy,' Nexstar chief executive officer Perry Sook said Tuesday on a call with investors. 'We're grateful that the Trump administration and Federal Communications Commission (FCC) Commissioner Brendan Carr recognise the urgent need for meaningful regulatory relief.'
If the deal goes through, Nexstar said, the combined companies would have 265 full-power TV stations, reaching 80 per cent of US TV households. Current law bars a local station owner from serving more than 39 per cent of the country.
Nexstar, based in Irving, Texas, said that it has secured financing from several banks to help fund the takeover.
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Tegna shares were up as much as 4.8 per cent at US$21.15, trading less than a dollar below the deal price in New York on Tuesday. The stock had jumped 10 per cent this year through Monday's close. Nexstar was little changed at US$206.20.
The changes rippling through broadcast TV are also spilling into pay television. Comcast, parent of the USA and MSNBC networks, is spinning off most of its cable TV channels into a new company called Versant. Warner Bros, Discovery likewise plans to split off cable outlets like CNN and TNT.
Both Nexstar and Tegna operate stations affiliated with ABC, CBS, NBC and Fox. Nexstar also owns the CW network and NewsNation. The deal is subject to regulatory and shareholder approvals, and the companies said they expect it to close in the second half of 2026.
TV station owner Sinclair, one of the largest owners of television stations in the US, had also offered to combine its broadcast TV business with Tegna, according to a person with knowledge of the matter.
The Hunt Valley, Maryland-based broadcaster said on Aug 11 it had begun a strategic review that could lead to the sale or breakup of the company, which owns 178 stations.
The agreement Tuesday marks Tegna's second attempt at a sale. The company agreed in February 2022 to be acquired by Standard General LP in a US$5.4 billion transaction that fell apart after a long regulatory review. In 2019, Nexstar agreed to sell 11 stations to Tegna for US$740 million.
Since the Trump administration took office, the FCC has decided to rethink the cap on how large station owners can become. And in July, an appeals court overturned the so-called 'top four' rule, which bars a station owner from running two of the four top stations in a single market.
'Chairman Carr now has his majority and appears to be advancing a clear and encouraging agenda to allow broadcasters more scale in local markets and across the US,' Mike Steib, CEO of Tysons, Virginia-based Tegna, said on an Aug 7 earnings call. BLOOMBERG
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