Possible Bidding War Emerges for Tribune Media
May 01 2017 - 12:09AM
Dow Jones News
By Joe Flint
A potential bidding war is emerging for Tribune Media Co., one
of the nation's largest owners of local television stations.
Sinclair Broadcast Group Inc., 21st Century Fox Inc. in
partnership with private-equity firm Blackstone Group LP, and
Nexstar Media Group Inc. are all circling Tribune, according to
people familiar with the matter. The deadline for final bids is
Thursday, these people said.
With 42 television stations in some of the nation's biggest
markets including New York, Los Angeles and Chicago, Tribune is
very appealing. The Federal Communications Commission in early
April made a change to its TV ownership rules that would make an
acquisition of Tribune by another big broadcaster easier.
Baltimore-based Sinclair, which owns 173 stations, has stations
in midsize and small markets. But it doesn't have a strong presence
in the biggest cities, something a purchase of Tribune would
provide. Tribune has a market cap of $3.2 billion, and Sinclair has
a market cap of $3.6 billion.
Fox's interest in Tribune is motivated, in part, by a desire to
keep Sinclair from owning it, one of the people said. Sinclair is
already one of the biggest owners of stations "affiliated" with the
Fox network, and acquiring Tribune would add an additional 14. That
would give Sinclair significantly more leverage in negotiations
with 21st Century Fox.
21st Century Fox has had several meetings with Tribune about an
acquisition, people with knowledge of the talks said.
Blackstone, which doesn't own any television stations, would
provide cash for a purchase of Tribune with Fox putting its 28
television stations into the partnership, an executive close to the
two companies said.
21st Century Fox and Wall Street Journal parent News Corp share
common ownership.
News of 21st Century Fox and Blackstone Group partnering for a
potential Tribune Media bid was reported earlier by the Financial
Times.
Nexstar, a Texas-based broadcaster that owns 170 local
television stations, has also approached Tribune, one of the people
said. Its chief executive, Perry Sook, told analysts earlier this
year that the company was looking for opportunities to grow in
light of changes to the FCC's TV ownership rules.
Even with the relaxed FCC television ownership rules, Sinclair,
Nexstar, and a 21st Century Fox-Blackstone partnership could have
to sell off some stations to be in compliance with regulations.
Also, Tribune owns affiliates of Fox rivals ABC, NBC and CBS, which
could further complicate a Fox transaction.
Besides its local television stations, Tribune also owns the
entertainment cable channel WGN America. It is unclear if all the
suitors are interested in acquiring that property as well.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
April 30, 2017 23:54 ET (03:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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