Fox, Blackstone Said Teaming to Make Competing Tribune Bid

(Bloomberg) -- 21st Century Fox Inc., the media conglomerate controlled by Rupert Murdoch, is teaming with Blackstone Group LP to make an offer to acquire TV-station owner Tribune Media Co., rivaling a planned bid by Sinclair Broadcast Group Inc., people familiar with the situation said.

The all-cash bid would be funded by Blackstone while Fox would contribute its TV stations to the joint venture that would acquire Tribune, said one of the people, who asked not to be identified because the talks are private. The two sides are in talks about a deal ahead of a deadline this week for final bids. No agreement has been reached and talks may still fall apart.

Fox has been approached in recent weeks about backing an alternative to a takeover by Sinclair, which has been looking to acquire Chicago-based Tribune for a price said to be in the high-$30s a share. 

Shares of Tribune rose as much as 9 percent to $39.86 in New York, the biggest intraday advance in two months. Sinclair fell as much as 1.3 percent, while Fox slipped 0.4 percent.

A combination of Tribune and Sinclair, two of the country’s biggest TV station owners, would give Sinclair a stronger negotiating hand with Fox about how to split fees from cable providers. Yet Fox has a say in Tribune’s destiny because it has to consent to the transfer of the company’s affiliate agreements to a new owner, people familiar with the situation said previously.

Sinclair has been looking to finalize a deal by the time Tribune reports first-quarter earnings, which it’s slated to do during the week of May 8. Tribune Media has a market capitalization of about $3.2 billion.

Mergers of TV-station owners like Sinclair, Tribune and Fox was made easier last month when the FCC restored a rule that allows TV station groups to count just half of their coverage area for UHF (Ultra High Frequency) stations to comply with a 39 percent nationwide cap set by Congress.

Fox, Blackstone Said Teaming to Make Competing Tribune Bid

The FCC’s vote reversed a 2016 decision by the agency during the Obama administration. New Chairman Ajit Pai, a Republican, criticized the earlier action because it effectively tightened ownership limits without considering whether to raise the national cap.

The issue is a relic of days when UHF stations -- broadcasting on channels 14 and higher -- used signals that didn’t reach as far as stations assigned lower-numbered channels. That disappeared with the switch to digital TV in 2009.

Tribune said April 20 that the action was “a welcome step towards creating a more level playing field for all local broadcasters in their relationships with television networks, satellite operators, cable providers, and streaming video services.”