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Standard General, Apollo close in on $9B deal for Tegna, sources say

Standard General and Apollo Global Management are closing in on a roughly $9 billion deal for television station owner Tegna, sources close to the situation told The Post. The buyers and Tegna have cleared what sources saw as the major stumbling block: how much the Standard General-Apollo team would need to pay if the deal takes more than a year to clear the Federal Communications Commission and other regulators. Tegna had wanted a roughly $500 million break-up fee if the deal isn’t completed one year after it is inked — even if regulators weren’t the cause of a possible no-deal. But the TV giant in recent days has largely relented on that point, sources said. “Now it is only about price,” a source with knowledge of the situation said. The FCC presently has only four commissioners, instead of the normal five, making a deadlocked commission a possibility. Meanwhile, there is still a $1 or $2 a share gap on price, so there’s still only a 50-50 chance a deal will get signed, a source close to the matter said. But a month ago the chances of a deal happening were likely closer to 20 percent, the source said. Standard General and Apollo will likely need to pay at least $24 a share for Tegna, sources said, after previously bidding $22.65. The buyers seem open to raising their offer for the second time, sources said. Tegna’s shares have steadily risen based on market speculation over the last five trading days from $18.69 to $19.28 on Tuesday afternoon. The main question hovering over the potential deal is whether a Standard General-Apollo bid can withstand antitrust scrutiny. The FCC’s national media ownership rule prohibits any entity from owning commercial television stations that reach more than 39 percent of US television households nationwide. Tegna’s stations combined with those that Apollo already owns would surpass that mark. Apollo plans though to keep all but one of its current stations separate from a new Tegna. Apollo would only be a minority owner in the new Tegna, sources said. Apollo owns 33 television stations as part of its Cox Media Group. Cox Media Group overall says it reaches 52 million households. Tegna, spun off from newspaper giant Gannett in 2015, operates 64 television and two radio stations across 54 US markets. There would be overlap if one considered Cox and Tegna the same entity. Apollo’s Cox, for example, owns the ABC affiliate in Atlanta. Tegna also owns the NBC affiliate there, so the FCC would need to get comfortable with a Standard General-owned Tegna — in which Apollo owns a stake — and the contention that it would be run truly separately from Cox, a source said. The Apollo stations charge higher-than-average retransmission fees to cable operators, and even if Apollo only contributes the one station to Tegna, then Tegna can charge higher retransmission rates for all its stations. Industry practice is a station owner charges the highest rate to all cable companies. A Tegna spokesman declined comment.

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