Published: Tue, May 09, 2017
Economy | By Melissa Porter

Sinclair close to buying rival TV operator Tribune

Sinclair close to buying rival TV operator Tribune

USA broadcaster Sinclair Broadcast Group Inc said on Monday it would buy Tribune Media Co, one of the largest US television station operators, for about $3.9 billion cash and stock, and assume about $2.7 billion in debt. Tribune also owns cable network WGN America and a minority stake in the TV Food Network.

Sinclair expects to close the purchase during the fourth quarter of 2017.

The $4 billion deal is slated to be announced on Monday morning.

Sinclair will pay $43.50 per share to acquire Tribune. It also owns the cable channel WGN America.

Sinclair Broadcast Group announced Monday it will acquire Tribune Media Company for $3.9 billion, the latest sign that media and telecom giants plan to take advantage of a relaxed regulatory environment under U.S. President Donald Trump. In a December statement, Sinclair said that it had no such deal with Trump's team and that it had given both him and his Democratic rival Hillary Clinton "the same opportunities to be interviewed by our local anchors on a regular basis". Disaffiliating this many stations to launch their own network would seriously impact Sinclair's value in the short run - not a great look for a company that just took on an addition $2.7 billion in debt.

Sinclair, one of the largest television station operators in the country, is headquartered in Hunt Valley.

Tribune's portfolio would help expand Sinclair's already vast network of 173 stations in 81 US markets and marks the largest acquisition for the Baltimore-based company.

It added that it made sell certain stations in markets where its presence overlaps with Tribune's in order to meet antitrust requirements.

The deal values Tribune Media at $43.50 a share, an 8% premium to Tribune's $40.29 closing price Friday and a 26% premium over the price in February, before reports of a deal first surfaced.

David Smith, executive chairman of Sinclair, said that the Tribune transaction will be the largest acquisition in Sinclair's history.

Tribune's TV stations include 14 Fox affiliates, 12 CW affiliates, six CBS affiliates, three ABC affiliates, two NBC affiliates, three MyNetworkTV affiliates and two independent stations. Tribune Media has no TV holdings in the Palmetto State.

Tribune Media retained ownership of The Baltimore Sun building on North Calvert Street.

Tribune CEO Peter Liguori, who joined Tribune in 2013, stepped down in March and a permanent replacement has not yet been named.

Wells Fargo analyst Marci Ryvicker said that today's deal was done at a "very attractive" multiple and is "clearly accretive" to free cash flow.

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