Tribune Co to buy 19 local television stations from Local TV Holdings for $2.73 bn

The Tribune Co today said that it will buy 19 local television stations from Local TV Holdings owned by Oak Hill Capital Partners, for $2.73 billion in cash, becoming one of the biggest owners of commercial TV stations in the US.

The move comes just six months after Tribune, the publisher of the Los Angeles Times and the Chicago Tribune, emerged from bankruptcy protection.

The deal also comes just a few weeks after Dallas-based television broadcasting company Gannett Co, agreed to buy Belo Corp and its 20 local TV stations, for $1.5 billion. (See: Gannett to acquire TV broadcasting firm Belo Corp for $1.5 bn)

Chicago-based Tribune will buy all of Local TV's 19 television stations in 16 key markets, including Denver, Salt Lake City, Cleveland and Kansas City.

Tribune owns and operates 23 major-market television stations and reaches more than 80 per cent of US television households. The company broadcasting division is anchored by WGN America, which can be seen in more than 70 million US households via cable and satellite services.

Coupled with its 23 television stations, the deal would give Tribune a total of 42 television stations, including 14 CW affiliates, 14 Fox affiliates, 5 CBS affiliates, 3 ABC affiliates, 2 NBC affiliates and 4 independents.

Tribune said that it will own 14 stations in the country's top 20 markets and become the No.1 affiliate for Fox Broadcasting, owned by 21st Century Fox, expand its position as the No.1 CW affiliate group  - a joint venture between CBS Corp and Warner Bros - and add market-leading stations in prime cities such as Denver, Cleveland, St. Louis, Kansas City, Salt Lake City and Milwaukee.

Tribune's acquisition will enable it to maximise national and local advertising opportunities and take advantage of a larger footprint, across which it will distribute its video and digital content, especially created by the recently launched Tribune Studios and Tribune Digital Ventures.

Tribune expects the merger to generate more than $100 million in annual synergies within five years after closing.

Tribune will fund the transaction through a combination of debt financing and from a part of its cash on hand. It has received committed financing of up to $4.1 billion from JPMorgan Chase, BofA Merrill Lynch, Citigroup, Deutsche Bank and Credit Suisse, including a new $300 million revolving credit facility and the capacity to allow Tribune to refinance its existing debt.

''This is a transformational acquisition for Tribune - it makes us the #1 local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country. We couldn't be more excited about Tribune's future as America's leader in creating and distributing original content and local news programming,'' said Peter Liguori, Tribune's president and CEO.

''Local TV and Tribune have had a long, successful relationship over the last five years. Our cultures and operating philosophies are very similar, and we share a strong commitment to news and local programming excellence. I am grateful to our partners at Oak Hill Capital, who acquired the finest stations in the industry and helped us build this great company,'' said, Bobby Lawrence, CEO of Local TV.

The transaction has been approved by the boards of both Tribune and Local TV and is expected to close by the end of 2013, subject to antitrust and Federal Communications Commission (FCC) approvals.