Tribune Media Co (NYSE:TRCO) could be in focus on Monday as Sinclair Broadcast Group Inc (NASDAQ:SBGI) is said to be nearing a deal to buy it. The offer price is reported to be between $43 and $45 a share or about $4 billion. The stock has already gained more than five percent in the current month’s five trading sessions and the possible acquisition news could ignite further interest in the stock.
Sinclair Broadcast Group Inc (NASDAQ:SBGI) is reportedly keen to buy Tribune Media for a consideration price of nearly $4 billion. The objective of Sinclair is to have enough negotiations tools to talk to Twenty-First Century Fox Inc (NASDAQ:FOXA)’s domestic networks. If Tribune is acquire, then the merged entity could have a big chunk of broadcast affiliates of Fox in the United States. Sinclair sees the advantage of buying Tribune since that would enable it control most affiliates of Fox in the America.
The latest move assumed significance since it comes on the heels of Twenty-First Century held a discussions with Blackstone Group on submitting a proposal to buy Tribune Media last week. According to a Reuters report, Nexstar Media Group Inc (NASDAQ:NXST) was also keen on acquiring Tribune.
While Twenty-First Century Fox has not submitted any bid, Sinclair is reportedly considering offering $44 a share representing a premium of nearly 30 percent before the acquisition news broke out on February 18. The two companies are yet to announce any agreement between them and there is every possibility that the deal could not be carried on one or the other reason.
If Tribune is acquired by Sinclair, then there is every possibility that other smaller TV station owners could also be expecting a similar kind of takeover bid. That would mean that stocks like E.W. Scripps Co (NYSE) SSP) and Gray Television, Inc. (NYSE:GTN) could witness strong demand from investors with the hope of finding a new suitor.
There is also a possibility that there could be more than one bidding company on Tribune Media and that could lead to price war between one or more companies. That would enable the shares to gain in the immediate term.
Tribune shares closed with a gain of 1.77 percent on Friday.
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