Court Declines to Speed Standard General-Tegna Deal at FCC (1)

A court declined to speed regulatory consideration of Standard General LP’s proposed purchase of TV broadcaster Tegna Inc., leaving the $5.4 billion transaction to languish as a financing deadline nears.

In an order released Friday, the US Court of Appeals for the District of Columbia Circuit rejected Standard General’s request to order the Federal Communications Commission to decide by April 28 whether to approve the deal. Standard General had said a decision by that date would allow time for judicial review before a May 22 deadline when financing expires.

The FCC in February sent the deal proposed last year to a hearing before an agency administrative judge, a move that can take months to resolve.

Friday’s court order leaves hedge fund Standard General and Tegna with “very limited options” to force FCC action, said Bloomberg Intelligence analyst Matthew Schettenhelm.

“The companies may try the US Supreme Court’s ‘shadow docket’ next, but we view that as an even longer shot,” Schettenhelm said in a note.

Andrew Jay Schwartzman, a lawyer for unions opposing the deal, in an email said the decision “should be the end of the road” since the FCC can’t complete its hearing by May 22.

Standard General didn’t immediately comment.

Tegna dropped 2.9% to $16.56 at 10:56 New York time. Standard General’s offering price is $24 per share; the gap between the current price and the offer suggests investors see little chance the deal will go through.

The FCC said a hearing is needed to probe whether the deal might trigger price increases for consumers as TV stations boost charges for cable providers, or bring about job cuts. Standard General said it wouldn’t reduce newsroom staffing, and also said it wouldn’t immediately raise fees charged by stations it acquires.

The case is SGCI Holdings v FCC, No. 23-1084, US Court of Appeals for the District of Columbia Circuit.

(Updates with analyst reaction beginning in fourth paragraph.)

To contact the reporter on this story:
Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story:
Molly Schuetz at mschuetz9@bloomberg.net

Rob Golum

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