By David Shepardson
WASHINGTON (Reuters) – Sinclair Broadcast Group Inc and Tribune Media Co shares rose on Wednesday after U.S. President Donald Trump criticized the Federal Communications Commision for deferring a decision last week on their proposed $3.9 billion tie-up and a federal appeals court upheld a rules change on broadcast ownership rules.
“So sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune. This would have been a great and much needed Conservative voice for and of the People,” Trump wrote on Twitter.
Sinclair shares rose 2.3 percent to $26.65, while Tribune rose 2.4 percent to $33.63. Sinclair is down about 19 percent since FCC Chairman Ajit Pai said on July 18 he had “serious concerns” about the deal announced in May 2017.
Pai did not comment on Trump’s tweet but is set to testify alongside fellow FCC commissioners at a U.S. House of Representatives hearing on Wednesday.
The FCC voted last week 4-0 to refer the proposed merger to an administrative law judge to review questions about the company’s candor, a move that analysts say will likely lead to the deal’s collapse.
The FCC said Sinclair “did not fully disclose” facts about the merger, raising questions about whether the company “attempted to skirt the commission’s broadcast ownership rules.”
Sinclair, the largest U.S. television station owner, did not immediately comment on Trump’s tweet and has denied it misled the FCC about station divestitures.
Also on Wednesday, a federal appeals court in Washington rejected a challenge to reverse the FCC’s decision to reinstate rules that allow broadcasters to partially count some stations against national broadcast limits. The FCC has acknowledged that the rule “no longer has a sound technical basis” but reinstated it pending a broader review of the national ownership cap.
Sinclair had said without the rule it would not have been able to acquire as many Tribune stations as it sought.
Sinclair has said if the deal is approved, it would reach nearly 59 percent of the nation’s television households and come amid growing consolidation. Either Tribune or Sinclair can terminate the deal if it is not completed by Aug. 8.
On Tuesday, Cox Enterprises Inc said it was exploring strategic options for its 14 television properties, including stations in Atlanta, Seattle, Boston, Charlotte, North Carolina, Orlando, Florida, and Pittsburgh, Pennsylvania. Cox cited statements by Pai “that he intends to loosen rules around ownership of local TV stations.”
(Reporting by David Shepardson; Editing by Marguerita Choy)