WASHINGTON (Reuters) - Sinclair Broadcast Group Inc (SBGI.O) and Tribune Media Co TRCO.N shares rose on Wednesday after U.S. President Donald Trump criticized regulators for deferring a decision on their proposed $3.9 billion tie-up and a federal appeals court upheld a change in 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 closed up 3.8 percent at $27.05, while Tribune rose 3.3 percent to $33.92. Sinclair is down about 19 percent since Federal Communications Commission Chairman Ajit Pai said on July 18 he had “serious concerns” about the deal announced in May 2017.
Pai said on Wednesday he was not backing down from the decision to refer the deal for review by an administrative law judge despite Trump’s comments.
“I stand by our decision,” Pai told a U.S. House panel.
Pai, who has come under heavy criticism from Democrats previously for taking actions that could benefit Sinclair, said he did not make decisions based on the ideology of applicants but looked at the facts. “Nothing more, nothing less,” he said.
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.
Representative Frank Pallone, a Democrat, said on Twitter it was “outrageous that Trump is chastising the FCC for actually doing its job. Chairman Pai didn’t think Sinclair was being honest with the FCC, but all Trump cares about is media outlets that spread his lies.”
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 [COXET.UL] 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 and Tom Brown