KATV parent company to acquire KFSM parent firm

Sinclair Broadcast Group announced on Monday that it has entered into a definitive agreement to acquire Tribune Media Co. in a deal worth $3.9 billion. Sinclair is the parent company of Little Rock-based KATV Ch. 7 and Tribune is the parent firm for Fort Smith-based KFSM Ch. 5. Both Arkansas stations are content partners with Talk Business & Politics.

The outline of the deal includes Sinclair acquiring 100% of Tribune’s shares for $43.50 per share. The transaction between the two publicly-traded companies includes $2.7 billion in debt. Under the terms of the agreement, Tribune stockholders will receive $35.00 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. The total $43.50 per share consideration represents a premium of approximately 26% over Tribune’s unaffected closing share price on February 28, 2017, the day prior to media speculation regarding a possible transaction.

Tribune owns or operates 42 television stations in 33 markets, cable network WGN America, digital multicast network Antenna TV, has minority stakes in the TV Food Network and CareerBuilder, and a variety of real estate assets.

“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.”

“Today’s announcement is the culmination of an extensive strategic review, which has delivered significant value to our stockholders,” said 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% 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.”

The transaction has been unanimously approved by the boards of both companies and 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, and antitrust clearance.

In order to comply with FCC ownership requirements and antitrust regulations, Sinclair may sell certain stations in markets where it currently owns stations. Such divestitures will be determined through the regulatory approval process.