The merger that once seemed all but inevitable has fallen apart. According to The Wall Street Journal, Tribune Media has terminated its merger agreement with rival TV station-owner Sinclair Broadcast Group (Warning: source may be paywalled; alternative source). The company is also suing Sinclair for failing to make sufficient efforts to get their $3.9 billion deal approved by regulators. From the report: The suit, filed in Delaware Chancery Court, alleges that Sinclair breached the merger agreement by engaging in “unnecessarily aggressive and protracted negotiations” with regulators over their requirement that Sinclair divest stations in certain markets to obtain approval, Tribune said in a statement. The deal structures Sinclair proposed, which Tribune said were done to allow it to maintain control over stations, created risks for the deal in violation of the merger agreement. Tribune is seeking financial damages.
The collapse of the deal and lawsuit mark a stunning turn of events for a deal that when it was announced in April of 2016 seemed certain to receive regulatory approval. “Our merger cannot be completed within an acceptable time frame, if ever, Tribune Media Chief Executive Peter Kern said in a statement. “This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the merger agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.” The merger hit the rocks last month when FCC commissioners voted to send the proposed sale to a judge. “FCC chairman Ajit Pai raised ‘serious concerns’ about Sinclair’s selloff of 21 stations it had proposed in order to remain under station ownership limits post-merger,” Engadget reported last month. “Had Sinclair declined to sell off some stations, its 173 broadcast stations in 81 markets, combined with Tribune’s 42 stations in 33 markets would reach 72 percent of U.S. TV households.”
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