Standard General says Tegna press release contains 'false assertions'
A letter to the shareholders of Tegna from Standard General's Soohyung Kim stated, "I am writing you to correct several false assertions in TEGNA's press release dated January 15, 2020. While Standard General will not be responding publicly to every baseless allegation TEGNA may make, several of TEGNA's statements require refutation. TEGNA asserts that Standard General has a track record of actions favoring its interests over those of other shareholders. This is nonsense. Like other active investment firms, Standard General often takes substantial equity positions, and our principals have served on the boards of a number of public companies in which we have invested. As a matter of firm policy, our principals take no fees or other compensation for their board service. Standard General profits from stock price appreciation, in the same way as any other shareholder. We believe in complete alignment with shareholders' outcomes. Our objective is to help drive value creation through stock price improvement. If we succeed, all shareholders benefit. In the case of TEGNA, we have demonstrated our commitment by making an investment that is approximately 20 times that of the current board and management combined. TEGNA has also sought to mislead our fellow shareholders by raising spurious claims regarding conflicts of interest with Standard General's other investments. First, Standard General's investment in a woman- and minority-owned broadcasting start-up with approximately $10 million of annual cash flow hardly represents a conflict with TEGNA's business. Second, in our discussions with TEGNA, we committed not to make any new investment in TV stations without first offering the opportunity to TEGNA. In short, there is no conflict. In addition to engaging in personal attacks on me and Standard General, TEGNA's response purports to tout the accomplishments of TEGNA's current board and management. In fact, TEGNA's track record is one of long-term performance failure. In the case of nine of TEGNA's eleven directors, TEGNA's performance has lagged its peer group from the date that director joined the board up to the time Standard General disclosed its investment in TEGNA. In stark contrast, the market has reacted positively since Standard General's investment in TEGNA -- and continues to react positively today. Nor should our fellow TEGNA shareholders derive comfort from TEGNA's acquisition spree (which TEGNA mischaracterizes in its press release as a "disciplined approach to M&A"). TEGNA's recently posted investor deck declines to use industry standard metrics to describe the acquisition prices paid by TEGNA -- instead adjusting acquisition multiples for estimates of fully realized synergies and tax benefits (benefits that it has not quantified and that may never be realized) -- and obfuscating the fact that TEGNA has been paying top dollar for these assets. As a substantial shareholder, we hope these investments will pay off. But TEGNA's board and management should not hide behind non-standard metrics to justify their M&A spree. TEGNA's press release also claims that the current board and management are "[open] to all paths to create value for all of TEGNA's shareholders." However, representatives of Standard General sat, with other investors, in an investor meeting with TEGNA management last August, in which TEGNA's CFO denied that TEGNA had received a business combination proposal from Apollo Management. The next day, TEGNA hastily retracted this falsehood, admitting that it had received two separate proposals from Apollo in 2019, but declining to provide any further details. As a result, we must question whether shareholders can rely on TEGNA's assurances that the current board and management are open-minded. We believe Standard General's involvement is critical to ensure that TEGNA is on the right path to maximize shareholder value. While we are disappointed in TEGNA's shrill response, it has no impact on our plan to vigorously pursue representation on TEGNA's board and to drive value creation for all TEGNA shareholders."