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.”
10 Biggest Billion-Dollar Entertainment Deals in 2016 (Photos)
Media and entertainment dealmakers returned in full force this year after a quiet 2015, as there were nine mergers and acquisitions valued at more than $1 billion -- from Chinese buyers such as the Dalian Wanda Group to AT&T, which agreed to acquire Time Warner for $85 billion. Here's a rundown of the biggest.
Various
10. Disney buys a minority stake in BAMTech
Price tag: $1 billion
In August, the Mouse House announced that it paid $1 billion for a 33 percent stake in streaming video technology company BAMTech, which was spun off from Major League Baseball’s MLB Advanced Media. Disney plans to use BAMTech’s technology to launch a standalone ESPN streaming service – but without the same content as linear ESPN.
The real estate and entertainment conglomerate owned by China’s richest man continues to snap up showbiz companies by the billion, acquiring the Golden Globes and American Music Awards producer for a cool $1 billion earlier this month.
Dick Clark Productions
8. Rovi acquires TiVo
Price tag: $1.1 billion
Video technology firm Rovi Corp., bought the pioneering live-TV recording tech company for $1.1 billion in a deal that was finalized in September. After the deal was complete, Rovi adopted the better-known TiVo name.
Getty Images
7. AMC Theatres buys Carmike Cinemas
Price tag: $1.2 billion
Wanda-owned AMC Theatres acquired Carmike, the U.S.’ fourth-largest exhibitor, forming the biggest theater chain in the country with more than 600 theaters. That surpasses Regal Entertainment, which operates 565 locations.
AMC/Carmike
6. AMC Theatres buys Odeon & UCI Cinemas
Price tag: $1.2 billion
AMC also added Odeon & UCI Cinemas, Europe's biggest chain, to its ever-expanding suite of cinemas. AMC will rename the company to Odeon Cinemas Group and maintain its London headquarters.
AMC/Odeon & UCI
5. Dalian Wanda Group buys Legendary Entertainment
Price tag: $3.5 billion
Wanda was responsible for the first megadeal of 2016, when it acquired the “Jurassic World” production company for $3.5 billion. Legendary lost $500 million in 2015, but its action-packed fare such as “Warcraft” is popular in China’s fast-growing movie market.
Legendary/Wanda
4. Comcast's NBCUniversal buys DreamWorks
Price tag: $3.8 billion
The blowout success of animated films like “Zootopia” and “Finding Dory” was one of the stories of 2016, and NBCU doubled down on the genre by adding the “Kung Fu Panda” and “Shrek” studio to its fold.
DreamWorks
3. Lionsgate merges with Starz
Price tag: $4.4 billion
The “Hunger Games” studio and premium cable channel announced their merger plans in June, a year after telecom billionaire and major Starz shareholder John Malone bought a stake in Lionsgate. Starz will become an independently run subsidiary of Lionsgate once the deal is officially approved.
Lionsgate/Starz
2. Verizon buys Yahoo
Price tag: $4.8 billion – or maybe less
The embattled Internet 1.0 company finally found its lifeboat, selling its core business to Verizon for $4.8 billion in July, eight years after rejecting a $45 billion bid from Microsoft. But after the extent of Yahoo’s 2014 hack was revealed, Verizon was pushing for a $1 billion discount, and has been taking a second look at the deal.
Verizon/Yahoo
1. AT&T agrees to acquire Time Warner
Price tag: $85.4 billion
AT&T agreed to buy Time Warner, combining two century-old companies to create a content and distribution powerhouse in the biggest media deal since the ill-fated 2000 AOL-Time Warner merger. One caveat: Donald Trump, who has been an outspoken critic of Time Warner’s CNN, had threatened to block the deal. However, a Wall Street-friendly Republican Congress could provide a smoother path.
AT&T/Time Warner
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Rewind 2016: From China’s Dalian Wanda Group to AT&T, deep-pocketed buyers were chasing content all year
Media and entertainment dealmakers returned in full force this year after a quiet 2015, as there were nine mergers and acquisitions valued at more than $1 billion -- from Chinese buyers such as the Dalian Wanda Group to AT&T, which agreed to acquire Time Warner for $85 billion. Here's a rundown of the biggest.