Sinclair wanted the Belo group real bad, says an intriguing story on Bloomberg News, and twice tried to top Gannett’s (ultimately) winning offer for the stations.
Sinclair first sought to assemble a deal with various Belo shareholders, and then attempted to put together an offer with private-equity firm CVC Capital Partners Ltd., the people said. Neither effort led to a bid, they said, and Belo shareholders approved Gannett’s $1.5 billion offer on Sept. 25.
Belo was never contacted about Sinclair’s bid, says the report.
Sinclair Chief Financial Officer David Amy contacted large Belo shareholders, mostly hedge funds and arbitrage funds, on Sept. 19 to buy their Belo shares or to partner with them as part of the takeover effort, said one of the people. The Belo holders had for several weeks pressed to find another buyer willing to make a higher bid, and an offer was close to being arranged, said this person. The effort fell apart when one large Belo shareholder backed out, the person said.
Sinclair then tried to partner with London-based CVC on a bid that would have valued Belo at $15 a share, two of the people said, topping Gannett’s bid of $13.75. That arrangement also fell apart just before Belo investors voted on the Gannett offer, they said.
Bloomberg Industries analyst Paul Sweeney says Sinclair isn’t likely done building the group.
Lin, Gray and Raycom may be among companies that Sinclair could consider buying all or parts of, Sweeney said. Lin, the owner of 43 TV stations, has a market value of $1.2 billion, and Gray, which owns and operates TV stations in 30 markets, is valued at $432 million. Since Gannett announced the acquisition of Belo, Gray has climbed 38 percent and Lin surged 88 percent as investors anticipated the wave of mergers would continue. Raycom is controlled by its employees and owns or provides services for 53 stations.
“If those portfolios fit from a geographic perspective, I think they would certainly look at it,” Sweeney said.