$20 a share offer values broadcaster at $4.4B

Byron Allen, who has been building a media empire comprised of TV stations and The Weather Channel, has joined the bidding for giant broadcaster Tegna, according to published reports.

Allen made an offer of $20 a share in cash for Tegna, the Wall Street Journal said. That would value Tegna, which owns 62 stations at $4.4 billion, minus debt.

Tegna has already reportedly received bids from Gray Television and Apollo Global Management.

Tegna is also under pressure from activist investor Standard General, which owns a 9% stake in the company and is pushing to add five directors to Tegna’s board.

“Our read of the situation within Tegna is that they'd prefer to not be acquired by Apollo,” said Steven Cahall, analyst at Wells Fargo Securities. “We think prior overtures were met with resistance and while the price then might have been a reason to rebuff, we also think Tegna management has reservations about living under private equity oversight with the belief it could mean a bigger debt burden or more cost slashing that could hit newsrooms.”

At this point Cahall thinks Gray is least likely to win the bidding for Tegna because it can’t make an all-cash deal.

“Tegna could find itself in a practical two horse race between Apollo and Allen. With debt getting cheaper by the day, we think the price could go a little higher” in what could be a bidding war, Cahall said. “Standard General may have some ideas about what TGNA is worth and how to engage the buyers as well, and its strong vocal presence likely ensures no money will get left on the table.”