Tribune Media has backed out of its proposed $3.9 billion merger with Sinclair Broadcast Group and said it will be filing a lawsuit against the broadcasting giant for allegedly breaching their merger agreement.
The $3.9 billion acquisition was announced in May after Sinclair won the rights to Tribune Media at auction, which would have given Sinclair ownership or control of television stations in 72 percent of US markets, including majors like New York City, Chicago and Miami.
The breakup of the deal is a stinging defeat for Sinclair (SBGI), owner of dozens of local television stations. On Thursday, Kern said that any further delays would hurt his company - so the Tribune board made a decision to spike the deal.
It appeared for many months that the Trump Administration and its appointed FFC Chairman Ajit Pai were predisposed to support the proposed Sinclair acquisition, and related TV station divestures, despite opposition arguing that the combination would give Sinclair unprecedented control over the nation's TV outlets.
Sinclair did not respond to a request for comment Thursday morning. "Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable".
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The company is "open to all opportunities" in terms of industry consolidation or remaining independent, Tribune Media Chief Executive Officer Peter Kern told investors on a call on Thursday.
The deal was worth $3.9 billion for Tribune Media and would have added more than 40 stations including KTLA in Los Angeles, WPIX in NY and WGN-TV in Chicago to Sinclairs list of local affiliates.
Kern acknowledged that there would be "speculation" about who might buy Tribune, but urged employees to "shake off the cobwebs of deal distraction, ignore the outside noise, and continue delivering on our commitment to each other, to our customers, to our partners and to the communities we serve".
The Maryland company said Thursday in a prepared statement that the Tribune lawsuit is "entirely without merit".
He said the merger's failure was not the result of "an unwelcoming regulatory environment" but how Sinclair moved forward.
Mike Huckabee, (R-Ark.), and FBN's Maria Bartiromo and Kristina Partsinevelos on Tribune Media terminating its merger agreement with Sinclair Broadcast Group. Sinclair defended the script as a way to distinguish its news shows from unreliable stories on social media. "Instead, Sinclair fought, threatened, insulted, and misled regulators in a misguided and ultimately unsuccessful attempt to retain control over stations that it was obligated to sell".