Eight state attorneys general joined forces Wednesday to challenge Nexstar Media Group’s proposed $6.2 billion acquisition of Tegna through an antitrust complaint filed in Sacramento’s federal courthouse.
Nexstar Media Group, Inc., NXST
The coalition—comprising California, Colorado, New York, and five additional states—contends the transaction would result in excessive consolidation within local television markets. California’s top legal official, Rob Bonta, warned that reducing ownership diversity threatens the vibrancy of local journalism.
Nexstar currently holds the position as America’s largest local television station operator. Tegna maintains a top-five ranking, controlling or managing 64 broadcast stations nationwide.
Current federal regulations limit any individual company’s audience reach to 39% of American television households. The proposed Nexstar-Tegna combination would capture 60% of the market, necessitating regulatory modifications to gain approval.
FCC Chairman Brendan Carr has voiced his endorsement of the transaction and committed to advocating for its clearance. President Trump similarly expressed approval for the consolidation, posting on Truth Social that an enlarged Nexstar would provide a counterweight to what he characterized as “the Fake News National TV Networks.”
The state coalition maintains the combination would drive up costs for cable and satellite television subscribers. They further contend it would diminish the standard of local news programming.
New York’s Attorney General Letitia James announced she is pursuing an injunction applicable across all 44 states where both companies maintain broadcasting operations. She anticipates additional states will join the litigation irrespective of party lines.
California’s Bonta emphasized that Nexstar has failed to propose divesting any stations to address competitive concerns.
DirecTV, serving over 8 million pay-television customers, initiated its own lawsuit in Sacramento’s federal court. The satellite television distributor alleges Nexstar would exploit its enlarged footprint to increase the fees charged to distributors for station carriage.
“Nexstar will black out stations or threaten to do so as means of coercing the multichannel video programming distributor to agree to its pricing demands,” DirecTV stated in its court filing.
Both Nexstar and Tegna declined to provide immediate statements regarding the lawsuits.
The Justice Department’s antitrust unit continues examining the proposed transaction. A DOJ representative did not respond to inquiries about the current status of that investigation.
Notwithstanding the mounting legal challenges, Nexstar continues advancing its deal financing strategy. Sources familiar with the situation indicate the broadcaster plans to access the investment-grade bond market within the coming week.
Bank of America has signaled to market participants that Nexstar will secure a second investment-grade credit rating from Fitch, enabling the high-grade debt issuance to proceed. The company is additionally considering high-yield unsecured notes as components of the comprehensive financing structure.
The debt arrangement will refinance $5.73 billion in commitments from Bank of America, JPMorgan Chase, and Goldman Sachs. Wednesday marked the deadline for a $2.75 billion leveraged loan component associated with the transaction.
While Nexstar carries below-investment-grade issuer ratings from both S&P and Moody’s, its secured obligations hold a BBB- rating from S&P—the minimum threshold for investment grade classification. The broadcaster requires a second high-grade rating on secured debt to execute its investment-grade bond strategy.
Nexstar reached an agreement last August to acquire Tegna in the $6.2 billion transaction. NXST stock declined 4.73% following the announcement of the legal challenge.
The post Nexstar (NXST) Stock Tumbles 5% Following Multi-State Legal Challenge to $6.2B Tegna Acquisition appeared first on Blockonomi.
