In House - The FindLaw Corporate Counsel Blog

The $3.9 Billion Acquisition That Couldn't

Maybe there will be a meme somebody about how Sinclair Broadcast Group tried to buy Tribune Media.

If the $3.9 billion offer had succeeded, it reportedly would have created a broadcast group with access to 72 percent of U.S. households. Sinclair was a freight train on a mission.

But it takes more than wishful thinking to get somewhere in mergers and acquisitions. In this case, the Federal Communications Commission threw down an impassable barrier on the Sinclair railroad.

"Lack of Candor"

To get around potential antitrust problems, Sinclair told the FCC it would divest itself of certain stations. That's not exactly what happened; it was more like the little engine that couldn't.

The FCC had "serious concerns" about the company's efforts to sell off the properties. Sinclair engaged in "a potential element of misrepresentation or lack of candor" to get government approval, agency said.

It was a big deal that didn't happen; even President Trump weighed in: "So sad and unfair that the FCC wouldn't approve the Sinclair Broadcast merger with Tribune," he tweeted.

Tribune had heard enough, and pulled out. Add to that one lawsuit, and the story isn't over.

Takeover Over

In a press release, Tribune announced that it had filed suit against Sinclair in Delaware. According to reports, the lawsuit says Sinclair acted in "blatant violation of the merger agreement."

Peter Kern, CEO of Tribune, said the delayed buyout would be detrimental to the company and its shareholders. He said the lawsuit will "hold Sinclair accountable."

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