- Tegna Inc.( NYSE: TGNA ) shares represent a buying opportunity as the selloff appears to be overdone even as Standard General sale is likely dead after the Federal Communication Commission's action on Friday, according to United First Partners. Tegna plunged 19% in regular trading on Monday.
- The FCC's Media Bureau issuing a hearing designation order is like "fatal" to the transaction as the Standard General/Tegna merger agreement provides that either side can terminate the deal if the FCC issues a Hearing Designation Order, according to UFP analyst Larry Feldman.
- FCC Chair Jessica Rosenworcel's decision to direct the Media Bureau to the send the deal to an administrative law judge likely indicates that she doesn't believe there were any "adequate remedies" the parties could offer, Feldman wrote in a note.
- Earlier Monday Benchmark analyst Daniel Kurnos wrote that the FCC action effectively killed the deal . Standard General said it's calling on the FCC to formally vote on the proposed transaction and render a decision on the merits, according to a statement on Monday. Tegna earlier said it was evaluating its options after the FCC action.
- UFP'S Feldman argues that Tegna ( TGNA ) has a fundamental valuation at ~$20 a share including Q4 results and a $136 million after-tax termination fee.
- "Additionally, we highlight TGNA’s penchant for share buybacks, which could become a key factor given its relatively low net leverage profile (2.5x) compared to its peer group (~5x based on 2023/2024 Cycle EBITDA)," Feldman wrote. "Idiosyncratic headwinds at peers SBGI and GTN could also result in an overweighting of TGNA by long-only type investors."
- The UFP analyst also highlighted that Byron Allen's Allen Media was reportedly bidding $23 a share for Tegna before Standard General was chosen, though any future Allen bid is likely to be below $23, given concerns about over leverage at Allen Media.
- Earlier Tegna reported Q4 results.
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Buy Tegna even as Standard General deal likely dead after FCC hearing order