An auction of the TEGNA Inc. (NYSE:TGNA) has been thrown into doubt as the company has questioned whether a prospective sale to a leading bidder would face antitrust concerns from US regulators, The Post has learned. The broadcasting giant announced September 21, 2021 it had received buyout proposals and that it planned to review them. Nevertheless, more than a week later Tegna has not begun negotiations with a key bidding bloc that consists of hedge fund Standard General L.P. and Apollo Global Management, Inc. (NYSE:APO), two sources close to the situation said.

That's despite Standard General and Apollo expressing a willingness to increase their $22-a-share fully-financed offer, which currently values the company at upwards of $4.8 billion, sources said. Instead, sources said Tegna is asking Standard General and Apollo questions around whether their bid can withstand antitrust scrutiny from the Federal Communications Commission. “I think there is a 50 to 75 % chance a deal happens,” a somewhat skeptical source close to the situation said.

The possible stumbling block has emerged amid a rocky history between Tegna and Standard General — headed by Soo Kim, the savvy hedge-fund mogul who recently has been assembling a US casino empire under the Bally's moniker. Kim — whose firm had pointed to allegations of discrimination and racial bias against Tegna in a series of lawsuits — has no intention of keeping Lougee if he buys the company, sources said. Standard General, not Apollo, would be the controlling owner of the new Tegna, sources said.

Tegna over the last month has invited Standard General and Apollo, as well as the comedian-turned-media-mogul Byron Allen who is teaming up for a bid with buyout firm Ares Management, into its data room to review its confidential financial information. In exchange, Tegna got Standard General to sign an agreement it would not engage in another proxy contest for more than a year, sources said. As for the antitrust concerns, the FCC's national media ownership rule prohibits any entity from owning commercial television stations that reach more than 39 % of US television households nationwide, with a discount given to stations operating on UHF channel 14 and above.

The proposed buyout, when combining Tegna's stations with those that Standard General and Apollo already own, would exceed that number. The suitors, however, claim they are not planning to roll most of their existing stations into the post-Tegna company, sources said. Meanwhile, Byron Allen and his bidding partner Ares Management Corporation (NYSE:ARES) have not come up with all the money to fund their $23-a-share bid, sources said.

Allen is finding it difficult to raise the preferred equity he needs, and is believed to be more than $1 billion short, sources said. Part of the difficulty is Allen Media owes debt equal to about seven times its earnings giving the Weather Channel owner little equity value, sources said. Morgan Stanley is Byron Allen's lender and is expected to refinance all of Allen Media if they succeed in buying Tegna, the source added.