Sinclair Broadcast Group Acquires Tribune Media for $3.9 Billion

Buyer will also assume Tribune’s $2.7 billion in debt

Last Updated: May 8, 2017 @ 7:15 AM

Sinclair Broadcast Group confirmed Monday that it will acquire Tribune Media for roughly $3.9 billion. The soon-to-be parent corporation will also absorb $2.7 billion in debt from WGN America owner.

The price tag of just under $4 billion breaks down to $43.50 per share, which will pay out in a mixture of cash and stock. More specifically, TRCO shareholders will get $35 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock they own.

That $43.50 represents a 26 percent premium above what TRCO was trading for on February 28, 2017, which was the last day before media speculation of a sale. Pre-market, shares of Tribune Media are trading up about two bucks apiece.

The transaction has been unanimously approved by the boards of directors of both companies. It is anticipated to close and fund in the fourth quarter of 2017. Completion of the transaction is subject to approval by Tribune’s stockholders, as well as customary closing conditions, including approval by the Federal Communications Commission (FCC), and antitrust clearance.

This deal marks the first major acquisition of a TV broadcasting group announced since the FCC voted last month to overturn a 2016 decision limiting the number of television stations some broadcasters can own. Twenty-First Century Fox was also in on the bidding for Tribune’s local TV empire.

Chicago-based Tribune Media owns or operates 42 TV stations and reaches more than 43 percent of the nation including major markets like New York, Chicago and Miami. It also owns the cable channel WGN America, digital multicast network Antenna TV, minority stakes in the TV Food Network and CareerBuilder and a variety of real estate assets.

Sinclair currently operates 171 TV stations in 81 markets, mostly in the South and Midwest.

“This is a transformational acquisition for Sinclair that will open up a myriad of opportunities for the company,” said Chris Ripley, president and CEO of Sinclair. “The Tribune stations are highly complementary to Sinclair’s existing footprint and will create a leading nationwide media platform that includes our country’s largest markets. The acquisition will enable Sinclair to build ATSC 3.0 (Next Generation Broadcast Platform) advanced services, scale emerging networks and national sales, and integrate content verticals. The acquisition will also create substantial synergistic value through operating efficiencies, revenue streams, programming strategies and digital platforms.”

“This will be the largest acquisition in our company’s history, and I want to thank everyone from the Sinclair team, as well as our advisors and bankers who made this possible,” added David Smith, executive chairman of Sinclair. “Television broadcasting is even more relevant today, especially when it comes to serving our local communities. Tribune’s stations allow Sinclair to strengthen our commitment to serving local communities and to advance the Next Generation Broadcast Platform. This acquisition will be a turning point for Sinclair, allowing us to better serve our viewers and advertisers while creating value for our shareholders.”

“Today’s announcement is the culmination of an extensive strategic review, which has delivered significant value to our stockholders,” stated Peter Kern, Tribune’s CEO. “Since we announced the strategic review 15 months ago, we have streamlined the business, monetized non-core assets, strengthened our balance sheet and returned more than $800 million to stockholders — all of which has resulted in a 50 percent increase in stockholder value. We are extremely proud to join Sinclair, and we’re excited that Tribune stockholders and employees will have the opportunity to participate in the long-term growth of the combined company.”