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Byron Allen makes US$8.5b offer for Tegna

[NEW YORK] Comedian and TV producer Byron Allen has made a US$20-a-share, all-cash offer for Tegna in a deal that values the TV station owner at US$8.5 billion, including debt, according to a person familiar with the situation.

The media mogul and on-air talent plans to merge his existing businesses, which include 15 local TV stations and the Weather Channel cable network, into an entity called Allen Media, according to the person, who asked not to be identified because the discussions were private.

When combined, the Tegna and Allen businesses would have total cash flow of about US$2 billion, the person said.

Tegna declined to comment, citing a policy not to discuss market rumours.

Allen would be competing with a bid of about the same size from Gray Television, but that deal includes stock and may require the divestiture of stations. Apollo Global Management  has made its own roughly US$8.5 billion cash offer.

Tegna, the former TV-station arm of Gannett, was spun off in 2015 and retained the old Gannett's trading history. It has about 60 TV stations in 51 US markets, reaching about 38 per cent of US households. Gray operates local stations in 91 markets, mainly in the South, Midwest and Southwest, reaching about 24 per cent of US households.