Takeaways
- Although it is difficult to project the exact timing of regulatory approval, the DOJ and FCC reviews of Tribune/Nexstar have not created any unexpected issues, said a person familiar with the regulatory process. There is no obvious hurdle that would prevent Q3 approval, the person said.
- “I think Q3 is more than doable,” agreed an industry participant. “I don’t see it slipping. There’s really not anything to hold the deal up.”
- Opposition from groups such as the America’s Communications Association, or ACA, and DISH Network Corporation is unlikely to affect the transaction, the industry participant said.
Nexstar’s acquisition of Tribune is not facing any significant hurdles at the DOJ or FCC, making it possible the companies will obtain regulatory approval in the third quarter of this year, according to a person familiar with the regulatory process and an industry participant.
“There is nothing that would delay this until the fourth quarter,” said the person familiar. Although it is difficult to project the exact timing of regulatory approval, the person did not see any upcoming challenges to the regulatory filings pending at the FCC and DOJ.
The only substantive issue the companies seemed to face was in Indianapolis, where Nexstar initially intended to keep Tribune’s duopoly. However, the companies have since resolved that issue by agreeing to make divestitures in Indianapolis. “Everything is moving along as expected,” the same person said.
The industry participant agreed that despite mild opposition from groups such as the America’s Communications Association, or ACA, and DISH Network Corporation, the transaction is likely to have a relatively quick regulatory review. “I think Q3 is more than doable,” the industry participant said. “I don’t see it slipping. There’s really not anything to hold the deal up.”
In terms of timing, one consideration is that the FCC typically acts after the DOJ has finished its review of a transaction. Given that the DOJ is reviewing major deals such as Sprint/T-Mobile, the timeline for Tribune/Nexstar could be delayed slightly even though the companies are doing “everything right” to get their deal done, the industry participant said.
As noted, there has been some opposition to the transaction from the ACA, which has said that industry participants have found it difficult to negotiate with Nexstar. However, these characterizations of Nexstar are unlikely to affect the merger, as
reported.
DISH has also opposed the transaction, stating in an FCC filing
released on April 10 that the merger will lead to higher prices and not necessarily to higher quality. However, the industry participant said that advocacy by individual market players and small policy groups does not represent a threat to the transaction. “Absent a big coalition with a lot of money, it’s hard to see how this doesn’t get done and get done very quickly,” the industry participant said.
Reorg M&A’s previous coverage of this transaction can be found
HERE.
--Ryan Lynch