TYSONS, Va.—Tegna has announced that Tegna’s merger agreement with an affiliate of Standard General L.P. has been terminated and that it is planning a $300 million accelerated share repurchase (“ASR”) program and a 20 percent increase in its quarterly dividend.
The announcement came as the financial agreements needed to fund the deal expired on May 22 without Standard General obtaining approval from the FCC to complete the deal.
Under the terms of the merger agreement, Tegna said it is entitled to receive a termination fee of $136 million from Standard General.
In the wake of the deal’s collapse Tegna said its Board of Directors and management team are also actively reviewing the return of additional excess capital that accumulated during the pending merger.
Tegna said it will enter into a $300 million ASR agreement with JPMorgan Chase Bank, which is expected to be completed by the end of the third quarter of 2023. The ASR will be funded through cash on hand, which stood at $683 million at the end of the first quarter of 2023.
The Tegna Board also approved a 20 percent increase to the Company’s regular quarterly dividend from 9.5 to 11.375 cents per share. Tegna will pay the previously declared regular quarterly dividend of 9.5 cents per share on July 3, 2023, to stockholders of record as of the close of business on June 9, 2023, and expects the increased dividend announced today to be in effect in future regular quarterly dividend payments, subject to the Board’s declaration. This increase brings Tegna’s total dividend payout growth to 63 percent since March 2021.
Dave Lougee, president and CEO of Tegna, said, “I am extremely proud of our Tegna colleagues for remaining focused on our business despite the distractions of a long-pending transaction. Their hard work and dedication have maintained strong business momentum, building on record total company revenue, subscription revenue, net income, free cash flow and Adjusted EBITDA in 2022. As we look ahead, we are confident that Tegna is well positioned to continue serving all our stakeholders based on our portfolio of leading broadcast assets and innovative digital brands, our delivery of high-quality, trusted news and content in the markets where we operate, and our continued focus on fostering a culture of diversity and inclusivity.”
“Tegna’s standalone financial position and outlook are a direct result of our great team, our impactful local content, our predictable cash flows, and our strong balance sheet with the lowest leverage levels since Tegna became a pure-play broadcasting company,” Lougee added. “With no near-term maturities and attractively priced fixed rate debt, Tegna’s balance sheet remains best in class, and we expect to maintain net leverage below 3.0x.”
Several unions and groups who had opposed the deal issued statements in response to the news. “This is a major victory for our union members, who have been fighting the hedge fund takeover of local news for more than a decade,” said NewsGuild-CWA President Jon Schleuss. “For too long, hedge funds like Standard General, Alden Global Capital and Chatham Asset Management have taken over local newsrooms, taken on massive amounts of debt and cut jobs and local news coverage to service that debt.”
“Today we secured a major victory in preventing yet another attempt by hedge funds to take over local news,” he said.