Tegna Inc (TGNA.N) said on Sunday that two potential acquirers had ended deal discussions with the U.S. regional TV station operator following the "market dislocation" fueled by the global coronavirus outbreak.
The two parties that informed Tegna they would no longer engage in negotiations were peer Gray Television Inc (RTN.N) and private equity firm Apollo Global Management Inc (APO.N), according to people familiar with the matter.
Tegna said in a statement that the two parties "made their proposals shortly before the recent market dislocation due to the COVID-19 pandemic and both subsequently informed TEGNA that they were ceasing discussions."
Reuters reported earlier this month that Gray had withdrawn a cash-and-stock offer that valued Tegna at $8.5 billion, including debt, amid concerns over the coronavirus pandemic's financial impact and a steep decline in Gray's shares.
Apollo, whose assets include 13 TV stations and 54 radio stations that it acquired from Cox Enterprises Inc last year, also informed Tegna last week it would not go forward with its all-cash bid. That offer also valued Tegna at $8.5 billion, including debt, the equivalent of $20 per share.
Media investor Byron Allen and a consortium led by private investment firm Najafi Companies and Trinity Broadcasting Network, which had also bid $20 per share for Tegna, remain interested in a deal, according to the sources.
Yet without referring to them by name, Tegna said on Sunday those two parties had not signed confidentiality agreements to enable due diligence, and had not delivered any information on financing sources.
The sources requested anonymity to discuss confidential details of the negotiations. Apollo, Gray, Allen, Najafi and Trinity Broadcasting Network did not immediately respond to requests for comment.
"The board has been, and remains, willing to consider transactions that create compelling value, and our focus now is on helping management navigate through an unprecedented environment," Tegna Chairman Howard Elias said in a statement.
Tegna's announcement is a blow to Standard General, a hedge fund that owns roughly 9.7% of Tegna and has been calling for it to sell itself. Standard General is asking Tegna shareholders to vote for its five nominees to Tegna's 12-member board in the company's annual shareholder meeting on April 30.
"By their own admission, (Tegna) has been unwilling to provide access to information unless suitors first demonstrate certainty of financing. The board's actions appear designed to end this process before it can even begin in earnest," Standard General said in a statement.
While the regional TV sector is benefiting from increased political advertising this year ahead of the U.S. presidential election in November, TV advertising budgets have been in decline as media consumption shifts to the internet and online streaming. The decline has accelerated as the coronavirus outbreak weighs on consumer spending.
Tegna, a spinoff of Gannett Co Inc's (GCI.N) broadcasting and digital arm, runs 62 television stations in 51 U.S. markets, and reaches 39% of television households in the United States.
(Reporting by Greg Roumeliotis in New York; Additional reporting by Bhargav Acharya in Bengaluru and Svea Herbst-Bayliss in Boston; Editing by Diane Craft and Peter Cooney)