NEW YORK, Jan. 15, 2020 /PRNewswire/ -- Standard
General L.P., one of the largest shareholders of TEGNA Inc. (NYSE:
TGNA), and the owner of approximately 9.7% of the Company's
outstanding shares, today announced that it will nominate a slate
of four highly qualified, diverse and independent candidates for
election to the Board of Directors at the Company's 2020 Annual
Meeting of Shareholders.
Standard General also announced that it has issued the following
open letter to TEGNA shareholders.
A LETTER TO THE SHAREHOLDERS OF TEGNA
INC.
January 15,
2020
Dear Fellow Shareholders,
Standard General L.P. and its affiliated investment funds are
the owners of approximately 9.7% of the outstanding shares of TEGNA
Inc. We are the Company's largest shareholder, excluding index
funds, and we own approximately 20 times as many shares as
the current Board and management combined. Our interests are
directly aligned with yours.
Standard General has an excellent track record of delivering
profitable outcomes in similarly situated local television
broadcasting companies. Media General, Inc. (NYSE:MEG) was a
publicly-traded broadcaster which, like TEGNA, had a long tradition
in print media, but had divested those assets to pursue a pure-play
broadcasting strategy. From our position as a substantial
shareholder, and with a single Standard General principal on the
board, we worked constructively with the management team and
directors to help guide the company through a merger with
publicly-traded LIN Media LLC (NYSE: LIN) that more than doubled
its station portfolio. Following that merger, we helped oversee
substantial increases in cash flow through a series of operational
improvement initiatives and strategic acquisitions before
ultimately selling the combined company to Nexstar Media Group
(NASDAQ: NXST) in a cash and stock transaction valued at
approximately $5 billion. The sale
price represented a multiple of 11.2x EBITDA and an implied return
of 179% during our 3.6 years of ownership. Holders who continue to
own the stock today have earned a 280% return over 6.6
years.1
Standard General invested in TEGNA because of our conviction
that TEGNA should be the premier pure play local broadcasting
company. TEGNA is the most important local affiliate television
broadcasting company not currently at the regulatory ownership cap.
TEGNA owns more Big 4 network affiliates in top 30 markets than any
company save the network operators themselves. Given the quality of
its assets, TEGNA should be delivering best-in-class performance,
and commensurate shareholder returns.
TEGNA shares, however, have consistently underperformed its
closest local broadcasting peers. From the time of TEGNA's spin-off
of Cars.com to become a pure-play broadcaster in June 2017 until Standard General disclosed its
ownership stake on August 14, 2019,
TEGNA's stock price declined by 13% vs. a 39% increase for its peer
group and a 17% increase for the S&P 500. In contrast, since we
disclosed our ownership stake and the press reported that Apollo
Global Management was interested in buying TEGNA, the stock price
has increased by approximately 25%. In our view, this disparity in
stock price performance underscores that investors want and expect
significant changes at TEGNA.
Given Standard General's substantial investment in TEGNA, our
expertise in the broadcasting industry, and our focus on driving
value for all TEGNA shareholders, we strongly believe that TEGNA
shareholders would benefit from having a representative of Standard
General on the TEGNA board.
We did engage the company in an effort to reach a consensual
solution, and are disappointed that members of management and the
TEGNA board refused our reasonable request for board
representation. In our view this refusal reflects a continued
pattern of passivity by the TEGNA board in the face of persistent
underperformance, a questionable M&A strategy, excessive
leverage and, recently, the apparent rebuff of an acquisition
proposal at a premium valuation from a credible buyer. As a result,
we are compelled to take the step of nominating our own candidates
for election to the TEGNA board.
We believe that the addition of our four highly qualified,
diverse and independent nominees to the TEGNA Board is a critical
first step to ensure that TEGNA is on the right path to maximize
value for all shareholders. Our nominees have significant operating
experience in the television broadcasting industry and backgrounds
spanning strategic planning, finance, M&A, and technology.
Collectively, they have decades of experience as CEOs, CFOs, COOs,
and directors of well-performing broadcasting companies. Our
nominees are committed to rigorous oversight of TEGNA's management,
operations and business strategy. Importantly, with the addition of
our nominees, TEGNA's board would much better reflect the diversity
of its audience.
We look forward to engaging with you and sharing additional
detail on our plans for TEGNA in the coming weeks and months.
Best Regards,
Soohyung Kim
Founding Partner
Standard General L.P.
Biographies of Standard General's Nominees (in
alphabetical order)
Colleen B. Brown is the
founder of Marca Global, LLC, a marketing technology company. Ms.
Brown served as President and Chief Executive Officer of Fisher
Communications, Inc. (NASDAQ: FCSI) from 2005 to 2013 and as a
director of Fisher Communications, Inc. from 2006 to 2013. She also
served as Senior Vice President of Belo Corporation, President of
the Television Division of Lee Enterprises, and President and
General Manager of various companies at Gannett Co. Inc. Ms. Brown
currently serves as a director of Big 5 Sporting Goods Corporation
(NASDAQ:BGFV), TrueBlue, Inc. (NYSE:TBI), German-based Spark
Networks, and privately held Port Blakely Companies. She has
previously served as chairperson of the board of American Apparel,
Inc., and on the boards of Career Builder, Classified Ventures, and
DataSphere Technologies. In 2017, Ms. Brown was honored as Director
of the Year by the Pacific Northwest National Association of
Corporate Directors (NACD). Ms. Brown was inducted in 2014 to the
GAMCO Management Hall of Fame. Ms. Brown is also a Henry Crown
Fellow and member of the Aspen Leadership Institute. Ms. Brown
holds a B.S. from the University of
Dubuque and M.B.A. from the University
of Colorado. As a director, Ms. Brown will bring to the
Board extensive executive experience in strategic planning,
operations, finance, and technology. Her leadership as a public
company Chief Executive Officer, as well as a senior officer in two
large media companies, will be a valuable resource to the
Company.
Ellen McClain
Haime is the Chief Financial Officer of Year Up,
Boston, MA, a not-for-profit
provider of job training services. Ms.
McClain previously served as Vice President, Finance of
Hearst-Argyle Television, Inc.(NYSE:HTV), a
publicly-traded owner/operator of 29 television
stations. Prior to her role at Hearst-Argyle, Ms. McClain
served as Senior Vice President, Chief Financial Officer and
Vice President,
Corporate Development at Granite Broadcasting
Corporation. Ms. McClain serves on the Board of Directors of Crane
Co. (NYSE: CR), a diversified manufacturer of highly engineered
industrial products. Ms. McClain previously served as
President, Chief Operating Officer, Senior Vice President and Chief
Financial Officer for the New York Racing Association, Inc.,
the operator of three of the largest racetracks in
the United States. Ms. McClain
earned a B.A. in Economics from Brown
University and a Master in Business Administration
degree from Harvard University. As a
director, Ms. McClain will bring to the Board extensive
financial, operational and organizational expertise gained as Chief
Financial Officer, Chief Operating Officer, and President of public
and private enterprises.
Soohyung Kim is the
Founding Partner of Standard General L.P., an investment firm, and
is the firm's Chief Executive Officer and Chief Investment Officer.
Mr. Kim served as a director of New Young Broadcasting Holding Co.,
Inc. and Media General from 2011 to its sale in 2017. Mr. Kim is a
director of Twin River Worldwide Holdings, Inc. (NYSE:TRWH), where
he serves as Chairman of the Board. Mr. Kim was inducted in 2016 to
the GAMCO Management Hall of Fame. Mr. Kim holds an A.B. from the
Woodrow Wilson School of Public and International Affairs at
Princeton University. As a director,
Mr. Kim will bring to the Board significant experience in the
television broadcasting industry as well as extensive M&A
experience and knowledge of the capital markets.
Deborah McDermott is the
Chief Executive Officer of Standard Media Group LLC.
Ms. McDermott has over twenty years of experience leading
broadcast groups, most recently as Chief Operating Officer of Media
General and as Chief Executive Officer and President of Young
Broadcasting. In these roles, Ms. McDermott served as a key
member of the leadership teams responsible for the successful
acquisition and integration of more than 90 stations.
Ms. McDermott is also a member of the Broadcasting &
Cable Hall of Fame and has served as Chair of the National
Association of Television Program Executives (NATPE), Chair of the
ABC Affiliate Board of Governors, and as a member of the Boards of
the National Association of Broadcasters (NAB) and the Television
Bureau of Advertising (TVB). Ms. McDermott is currently a
director of MediaCo Holding Inc. (NASDAQ: MDIA) and a director of
Truxton Trust. In addition, Ms. McDermott is a member of the board
of the Country Music Association. Ms. McDermott is a graduate of
South Dakota State University. As a
director, Ms. McDermott will bring to the Board significant
operating experience in the television broadcasting industry.
About Standard General L.P.
Standard General L.P. is a
New York City-based SEC-registered
investment advisor that manages event-driven opportunity funds.
Standard General was founded in 2007 and primarily manages capital
for public and private pension funds, endowments, foundations, and
high net-worth individuals. For more information, please visit
http://www.standardgenerallp.com/.
Investor Contacts
Bruce
Goldfarb / Jason Alexander /
Pat McHugh
Okapi Partners
info@okapipartners.com.
(212) 297-0720
Media Contacts
media@standgen.com
FORWARD-LOOKING STATEMENTS
All statements contained in this press release that are not
clearly historical in nature or that necessarily depend on future
events are "forward-looking statements," which are not guarantees
of future performance or results, and the words "anticipate,"
"believe," "expect," "potential," "could," "opportunity,"
"estimate," "plan," and similar expressions are generally intended
to identify forward-looking statements. The projected results and
statements contained in this press release that are not historical
facts are based on current expectations, speak only as of the date
of this press release and involve risks that may cause the actual
results to be materially different. In light of the significant
uncertainties inherent in the forward-looking statements, the
inclusion of such information should not be regarded as a
representation as to future results. Standard General L.P.
disclaims any obligation to update the information herein except as
may be required by law and reserves the right to change any of its
opinions expressed herein at any time as it deems appropriate.
Standard General L.P. has not sought or obtained consent from any
third party to use any statements or information indicated herein
as having been obtained or derived from statements made or
published by third parties.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Standard General L.P., together with the other participants
named herein, intends to file a preliminary proxy statement and
accompanying WHITE proxy card with the Securities and Exchange
Commission ("SEC") to be used to solicit votes for the election of
its slate of highly-qualified director nominees at the 2020 annual
meeting of shareholders of TEGNA Inc., a Delaware corporation (the "Company").
STANDARD GENERAL STRONGLY ADVISES ALL SHAREHOLDERS OF THE
COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR: Okapi Partners LLC, Bruce Goldfarb / Jason Alexander/ PAT
MCHUGH, 212-297-0720, info@okapipartners.com
The participants in the proxy solicitation are anticipated to be
Standard General L.P., Standard General Master Fund L.P.,
Soohyung Kim, Stephen Usher, David
Glazek, Michael Perrone,
Colleen B. Brown, Ellen McClain Haime and Deborah McDermott.
As of the date hereof, Standard General L.P. beneficially owns
21,124,315 shares of Common Stock, $1.00 par value per share of the Company (the
"Common Stock") in its capacity as the investment manager to
various private investment vehicles, including Standard General
Master Fund L.P., which is the record owner of 100 shares;
Soohyung Kim may be deemed to
indirectly beneficially own the shares of Common Stock beneficially
owned by Standard General L.P. As of the date hereof, Ms. Brown,
Ms. Haime, Ms. McDermott, Mr. Usher, Mr. Glazek and Mr. Perrone do
not beneficially own any shares of Common Stock.
1 Standard General was the largest holder of
New Young Broadcasting Holding Co, Inc. On June 6, 2013 New Young merged with Media General.
The day prior to the announcement of the transaction Media General
closed at $7.30 per share. In 2015
Media General agreed to be acquired by Nexstar Media. Group for
$10.55 per share in cash, 0.1249
shares of Nexstar stock per share of Media General stock, and a
contingent value right that paid $1.97 per share in cash.
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SOURCE Standard General L.P.