Sinclair broadcasting to buy Tribune Media for $3.9B
Combined company will cover 72% of U.S. homes in 108 markets
Sinclair Broadcast Group, the largest U.S. broadcaster, will acquire Tribune Media Co. in a deal worth nearly $4 billion that will put the combined company’s stations in nearly three-quarters of Americans’ homes.
Headquartered in Baltimore, Sinclair currently owns 173 stations and reaches more than 38% of the nation. The deal will widely expand Sinclair’s broadcast reach. Tribune Media has 42 stations including WGN and stations in Los Angeles, New York, Chicago and Philadelphia and reaches more than 43% of the nation.
The result of the deal, Sinclair’s largest, is “a broadcaster with as close to a national footprint as you can get,” said Tuna Amobi, equity analyst for CFRA Research, who maintained a Buy on Sinclair stock and a target of $44 per share. “It is going to be a very transformative acquisition, to say the least.”
The company said Monday it will pay about $43.50 for each Tribune share, or about $3.9 billion, and will assume about $2.7 billion in Tribune net debt.
Sinclair apparently won out over another reported suitor: media giant 21st Century Fox, which The Financial Times reported last week was in talks with private equity firm Blackstone in a joint bid to acquire Tribune Media.
The combined company will cover 72% of U.S. homes across 108 markets including 39 of the top 50, Sinclair says. “This combination creates the largest TV broadcasting company in the country,” Sinclair CEO Chris Ripley said Monday during a conference call discussing the deal.
The deal wouldn’t have been feasible until last month’s decision by the Federal Communications Commission to ease limits on TV-station ownership. Currently, a media company can own multiple TV stations as long as its market share doesn’t exceed 39% nationwide.
Tribune shares closed Monday up more than 5% to $42.37. Sinclair shares closed Monday down 0.8% ito $36.13.