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Tegna Falls Most Since 2008 After Apollo Is Said to End Talks

Tegna Falls Most Since 2008 After Apollo Is Said to End Talks

(Bloomberg) -- Shares of Tegna Inc. fell the most since November 2008 on Monday after Apollo Global Management Inc. ended its pursuit of the broadcaster, the second suitor to withdraw an offer during the turmoil in global markets.

Tegna fell as much as 27% to $9.61 in New York, valuing the company at about $2.1 billion.

Apollo on Friday informed Tegna that it would be putting its pencils down on any potential transaction due to the market meltdown caused by the Covid-19 pandemic, according to a person with knowledge of the matter who asked not to be identified as the discussions are private.

Apollo’s move follows a similar decision by rival suitor Gray Television Inc. earlier this month. Both Gray and Apollo had separately been working with Tegna and its advisers on due diligence for a potential takeover after submitting offers.

“These 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,” Tegna said in a statement Sunday.

The other two bidders that expressed interest in purchasing Tegna were TV producer Byron Allen and a consortium of Najafi Cos. and Trinity Broadcasting Network. These two parties “have not signed confidentiality agreements to enable due diligence and have not delivered any information on financing sources,” Tegna said.

Tegna chairman Howard Elias said the company had meaningfully engaged with third parties to explore opportunities to create value.

“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,” he said.

Tegna, which owns 62 TV stations in 51 U.S. markets, has been the target of activist investors Standard General LP and Donerail Group in recent months, which both pushed the company to explore a sale. The company in February rejected all four director nominees put forward by Standard General, its third-largest holder with about a 9.7% stake. It has nominated a fifth director.

“This board has created arbitrary deadlines and unnecessary preconditions,” Soo Kim, founding partner of Standard General, said in a statement. “The board’s actions appear designed to end this process before it can even begin in earnest.”

A representative for Apollo declined to comment.

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