Tribune Media Co. has terminated its merger agreement with Sinclair Broadcast Group Inc.
Also, the company has sued Sinclair Broadcast Group in the Delaware Chancery Court for allegedly breaching the merger agreement between the two companies. The lawsuit seeks compensation for all losses incurred as a result of Sinclair's material breaches of the agreement.
"In light of the FCC's unanimous decision, referring the issue of Sinclair's conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable time frame, if ever," Tribune Media CEO Peter Kern said in an Aug. 9 statement.
"This uncertainty and delay would be detrimental to our company and our shareholders," Kern added.
Tribune Media claimed that Sinclair engaged in "unnecessarily aggressive and protracted negotiations" with the U.S. Department of Justice and the Federal Communications Commission over regulatory requirements, refused to sell stations in the markets as required to win approval and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay — all in derogation of Sinclair's contractual obligations, according to Tribune's statement.
The statement came after Sinclair said it was still working with its takeover target Tribune "to analyze approaches to the regulatory process that are in the best interest of our companies, employees and shareholders."