By Diane Bartz and David Shepardson
WASHINGTON (Reuters) -Hedge fund Standard General sharply criticized the U.S. Federal Communications Commission's (FCC) decision to hold hearings on its $5.4 billion plan to buy television station operator Tegna, saying on Monday it was "tantamount to denying" the deal.
The FCC, which regulates telecommunications, said on Friday it would hold a hearing on the planned acquisition of Tegna, which manages 64 stations in 51 U.S. markets. Lengthy hearings have historically led deals to collapse. The Media Bureau made the decision rather than the full commission.
Standard General said it would press on with the planned acquisition and called on the FCC commissioners, two Democrats and two Republicans, to vote on the proposed transaction.
Tegna's share price fell sharply following the FCC's announcement after the market closed. Around midday on Monday, it traded at $17.23, which was 21% below Friday's close.
Standard General’s Managing Partner Soo Kim said the planned acquisition complied with FCC regulations and precedents. "Rather than rule on the transaction's merits, as the law requires, the Media Bureau is attempting to scuttle the deal by ordering a wholly unnecessary hearing process, that if left standing by the Commission, would kill the deal," Kim said.
The FCC declined comment on Standard General's criticism.
In announcing the decision on Friday, the FCC said the "proposed transaction could artificially raise prices for consumers and result in job losses."
Republican FCC Commissioners Brendan Carr and Nathan Simington criticized the decision to refer the matter for a hearing. "After a protracted, nearly yearlong review, the Commission should be providing the parties with a decision on the merits—not an uncertain future," they said in a joint statement.
When Tegna agreed in February 2022 to be acquired by Standard General, the agreement attracted criticism from some powerful corners in Congress, including then-House Speaker Nancy Pelosi.
Standard General, which is Tegna's third-largest shareholder, had said earlier that the U.S. Justice Department had allowed its antitrust review period to expire without taking any action.