NEW YORK, April 7, 2020 /PRNewswire/ -- Standard
General L.P., the largest shareholder of TEGNA Inc. ("TEGNA" or the
"Company") (NYSE: TGNA), with an ownership interest of nearly 12%
of the Company's outstanding shares, today released an investor
presentation detailing the performance failures, strategic
missteps, and corporate governance issues underlying sustained
underperformance and value destruction at TEGNA. The presentation
also highlights the expertise of Standard General's four nominees,
who are committed to a thorough review of TEGNA's operations,
capital allocation, and strategic alternatives to maximize value
for all shareholders.
Standard General encourages its fellow shareholders to read the
presentation, as well as its proxy materials and shareholder
letters, which are accessible at www.TomorrowsTEGNA.com.
Why Shareholders Should Vote for Change at TEGNA
- TEGNA's shareholder returns have drastically underperformed
peers. TEGNA's total shareholder return has underperformed its
closest peers over every relevant time period. TEGNA seeks to avoid
this conclusion by including a magazine publisher in its peer set
and uses a performance period during which media reports
speculating on a takeover surfaced, inflating TEGNA's stock price.
Despite having a premier collection of local affiliate broadcasting
stations, TEGNA lags peers on key operational and financial
metrics, including retransmission rates and EBITDA margins, and
top-ranked stations acquired by TEGNA have seen significant
declines in market share under current management.
- Management pursued an expensive acquisition binge that has
significantly increased leverage and risk without generating any
meaningful increase in shareholder value. Since June 2017, TEGNA has spent $2 billion on largely out-of-market acquisitions,
which were completed at high, above-market valuations. To complete
these transactions, TEGNA has levered the Company's balance sheet
to roughly 5x EBITDA—the highest level in its history—creating
significant risk and inflexibility. This capital could have been
more optimally deployed to enhance shareholder returns.
- TEGNA appears to have squandered the opportunity to maximize
the value of shareholders' investment through a sale of the Company
in a previously vibrant M&A market. Worse, TEGNA appears to
have engaged in a series of defensive actions that impeded
transformative M&A and destroyed shareholder value. Had
TEGNA actively pursued a strategic transaction in early 2019, we
believe it could have converted strong interest in a premium-priced
acquisition from multiple credible parties into a deal that would
have created significant value for shareholders. Instead, TEGNA
made large, expensive, debt-fueled acquisitions and issued
non-callable bonds with high breakage costs—driving up the cost to
acquire the Company and potentially limiting its universe of
possible buyers. Only after Standard General moved to replace a
minority of TEGNA's underperforming directors did TEGNA begin to
engage with interested parties. Even then, TEGNA appears to have
acted hesitantly and imposed unreasonable conditions on potential
bidders, including, according to media reports, demanding proof of
financing amid an unprecedented health and capital markets crisis.
Consequently, TEGNA was unable to capitalize on any of four
expressions of interest at $20 per
share: two potential suitors have reportedly dropped out of
contention, while two others have not been permitted to conduct due
diligence. As a result of the actions and omissions of the current
TEGNA Board, the window to maximize the value of shareholders'
investment in TEGNA may have closed. It should never have come to
this.
- TEGNA's Board lacks relevant experience and has adopted poor
governance practices. The current Board does not have a single
independent director with local affiliate broadcasting experience.
It has failed to implement an executive compensation structure that
appropriately incentivizes management to create shareholder value
and has not exercised discipline around capital allocation.
The presentation highlights that Standard General's four
exceptional nominees would bring new and independent perspectives
to TEGNA's Board, fill the critical void of relevant industry
expertise, and move swiftly to conduct a full and fair evaluation
of TEGNA's operations and strategic alternatives to maximize
shareholder value. If elected, the nominees have the following
priorities:
- Drive operational excellence – Review local broadcasting
operations to enhance operating efficiencies and retransmission
rates while ensuring TEGNA continues to deliver the highest quality
programming to serve the needs of its communities
- Optimize capital allocation – Review TEGNA's current
capital allocation framework and bring much needed rigor to its
acquisition evaluation process
- Improve corporate governance – Hold management
accountable for delivering results that grow shareholder value;
reevaluate existing management compensation and stock ownership
programs to align management's interests with those of
shareholders
- Thoroughly evaluate strategic alternatives – Review
prior expressions of interest in TEGNA and the Board's actions in
response to those overtures; evaluate the full range of strategic
alternatives available to TEGNA to maximize the value of
shareholders' investment
TRANSFORM TEGNA INTO THE BEST-IN-CLASS
OPERATOR
WE BELIEVE IT SHOULD BE – TOMORROW'S
TEGNA
VOTE THE WHITE PROXY CARD
TODAY
If you have any questions, or need assistance
voting your WHITE proxy card, please contact:
Okapi Partners
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
Telephone for Banks, Brokers, and International
Shareholders: +1 212-297-0720
Shareholders may call toll-free (from the U.S. and Canada): +1 855-208-8902
Email: info@okapipartners.com
About Standard General
Standard General was founded in
2007 and primarily manages capital for public and private pension
funds, endowments, foundations, and high net-worth
individuals. Standard General's extensive experience in local
television broadcasting includes investments in: Media General, a
former publicly-traded broadcasting company now part of Nexstar
Media Group; Standard Media Group, an innovative and diverse media
company committed to high-quality local news; and MediaCo Holding,
a holding company that invests in local broadcast media and radio
stations.
Media General was a publicly-traded broadcaster which, like
TEGNA, had a long tradition in print media, and had divested those
assets to pursue a pure-play broadcasting strategy. As a
substantial shareholder with a single Standard General principal on
the Board, we worked constructively with the management team and
directors to help guide Media General through a merger with
publicly-traded LIN Media LLC 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 in transaction valued
at approx. $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.
Media Contact
media@standgen.com
Important Information
Standard General L.P., together
with the other participants in Standard General's proxy
solicitation, has filed a definitive proxy statement and
accompanying WHITE proxy card with the Securities and
Exchange Commission ("SEC") to be used to solicit proxies in
connection with the 2020 annual meeting of shareholders (the
"Annual Meeting") of TEGNA Inc. (the "Company"). Shareholders are
advised to read the proxy statement and any other documents related
to the solicitation of shareholders of the Company in connection
with the Annual Meeting because they contain important information,
including information relating to the participants in Standard
General's proxy solicitation. These materials and other materials
filed by Standard General with the SEC in connection with the
solicitation of proxies are available at no charge on the SEC's
website at http://www.sec.gov. The definitive proxy statement and
other relevant documents filed by Standard General with the SEC are
also available, without charge, by directing a request to Standard
General's proxy solicitor, Okapi Partners LLC, at its toll-free
number 1-855-208-8902 or via email at info@okapipartners.com.
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SOURCE Standard General L.P.