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Tegna (TGNA) Buyout Delayed by Federal Communications Commission
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Tegna (TGNA - Free Report) taken over by hedge fund Standard General LP was delayed by the Federal Communications Commission (FCC). This delay could also put off the $5.4 million deal.
Standard General LP agreed to buy Tegna, which operates 64 TV stations as reported in February 2022. Apollo Global Management Inc also joined to fund the transaction.
The Federal Communications Commission fear that this take over might lead to rise in costs for the consumers. This may also lead to reduction of local content on TV stations.
A hearing will take place at a yet-to-be chosen date which would probably be beyond the time frame of the competition of the deal.
After the announcement, shares of tegna fell by 26% to $16.15. Standard General is offering $24 per share for the company. This difference in price and delay in completion pose a threat to the deal.
The NewsGuild-CWA union was against the deal as the union believed that the would-be buyers would cut jobs and reduce news coverage, just like private equity and hedge fund buyers of local newspapers have done in the past.
The company’s top line is driven by subscription, advertising and marketing services. Revenues increased 6.2% year over year in the third quarter of 2022 to $803.1 million, contributed majorly by subscription revenues of $377.3 million which accounted for 46.9% of the total revenues and advertising & marketing services revenues of $320.7 million accounted for 39.9% of the total revenues.
The company operates 64 television and two radio stations in 51 U.S. markets, catering to 39% of TV households in the United States. Tegna reaches about 50 million consumers on air and about 35 million digitally each month.
The focus on regional content is aiding subscription revenues from traditional cable, satellite operators and OTT providers. New station acquisitions also aided the expansion of the customer base.
Tegna announced a regular quarterly dividend of 9.5 cents payable on Apr 3, 2023 to stockholders of record as of the close of business on Mar 10, 2023.
Total cash was $377 million as of Sep 30, 2022 compared with $201 million as of Jun 30, 2022. Though cash was increasing, the total debt was $3.1 billion and net leverage was 2.53 times as of Sep 30, 2022.
Two notable multi-year affiliation agreements were renewed in the last quarter. These were with two of the big four networks namely CBS which covers 30% of Tegna households and FOX corporation accounts for 6% of Tegna households.
Zacks Rank & Stocks to Consider
Tegna currently has a Zacks Rank #5 (Strong Sell).
Some top-ranked stocks in the Consumer Discretionary sector are American Woodmark (AMWD - Free Report) , BJ’s Wholesale Club (BJ - Free Report) and Century Casinos (CNTY - Free Report) . While Century Casinos sports a Zacks Rank #1, American Woodmark and BJ’s wholesale Club carry a Zacks Rank #2 (Buy) at present.
Shares of AMWD have increased 8.5% in the past year. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, which has remained unchanged over the past 30 days.
Shares of BJ have jumped 16.9% in the past year. The Zacks Consensus Estimate for earnings is pegged at $0.88 per share, which has remained unchanged over the past 30 days.
Shares of CNTY have declined 25.9% in the past year. Its earnings is estimated to be 2 cents per share, which has fallen from 5 cents per share over the past 30 days.
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Tegna (TGNA) Buyout Delayed by Federal Communications Commission
Tegna (TGNA - Free Report) taken over by hedge fund Standard General LP was delayed by the Federal Communications Commission (FCC). This delay could also put off the $5.4 million deal.
Standard General LP agreed to buy Tegna, which operates 64 TV stations as reported in February 2022. Apollo Global Management Inc also joined to fund the transaction.
The Federal Communications Commission fear that this take over might lead to rise in costs for the consumers. This may also lead to reduction of local content on TV stations.
A hearing will take place at a yet-to-be chosen date which would probably be beyond the time frame of the competition of the deal.
After the announcement, shares of tegna fell by 26% to $16.15. Standard General is offering $24 per share for the company. This difference in price and delay in completion pose a threat to the deal.
The NewsGuild-CWA union was against the deal as the union believed that the would-be buyers would cut jobs and reduce news coverage, just like private equity and hedge fund buyers of local newspapers have done in the past.
TEGNA Inc. Price and Consensus
TEGNA Inc. price-consensus-chart | TEGNA Inc. Quote
Subscriber Growth Drives Tegna’s Top Line
The company’s top line is driven by subscription, advertising and marketing services. Revenues increased 6.2% year over year in the third quarter of 2022 to $803.1 million, contributed majorly by subscription revenues of $377.3 million which accounted for 46.9% of the total revenues and advertising & marketing services revenues of $320.7 million accounted for 39.9% of the total revenues.
The company operates 64 television and two radio stations in 51 U.S. markets, catering to 39% of TV households in the United States. Tegna reaches about 50 million consumers on air and about 35 million digitally each month.
The focus on regional content is aiding subscription revenues from traditional cable, satellite operators and OTT providers. New station acquisitions also aided the expansion of the customer base.
Tegna announced a regular quarterly dividend of 9.5 cents payable on Apr 3, 2023 to stockholders of record as of the close of business on Mar 10, 2023.
Total cash was $377 million as of Sep 30, 2022 compared with $201 million as of Jun 30, 2022. Though cash was increasing, the total debt was $3.1 billion and net leverage was 2.53 times as of Sep 30, 2022.
Two notable multi-year affiliation agreements were renewed in the last quarter. These were with two of the big four networks namely CBS which covers 30% of Tegna households and FOX corporation accounts for 6% of Tegna households.
Zacks Rank & Stocks to Consider
Tegna currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some top-ranked stocks in the Consumer Discretionary sector are American Woodmark (AMWD - Free Report) , BJ’s Wholesale Club (BJ - Free Report) and Century Casinos (CNTY - Free Report) . While Century Casinos sports a Zacks Rank #1, American Woodmark and BJ’s wholesale Club carry a Zacks Rank #2 (Buy) at present.
Shares of AMWD have increased 8.5% in the past year. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, which has remained unchanged over the past 30 days.
Shares of BJ have jumped 16.9% in the past year. The Zacks Consensus Estimate for earnings is pegged at $0.88 per share, which has remained unchanged over the past 30 days.
Shares of CNTY have declined 25.9% in the past year. Its earnings is estimated to be 2 cents per share, which has fallen from 5 cents per share over the past 30 days.