The Federal Communications Commission’s decision to shelve and probably kill the $5.4 billion purchase of TV station-owner Tegna Inc. delivers a warning to would-be media acquirers: Proceed at your own risk.

The agency on Feb. 24 sent the proposed transaction by Standard General LP to a hearing, likely delaying a decision beyond the parties’ May 22 deadline to close the deal. The order was issued by the FCC’s media bureau, which administers policy and licensing for TV and radio stations.

The decision is likely to chill further dealmaking in areas where the FCC holds sway, according to Standard General Managing Partner Soo Kim, as well as analysts who follow the agency. Going to a hearing would effectively “kill the deal,” he said in a statement.

“If we let this stand, we let whoever is in charge of the media bureau, typically the chair, decide any renewal or licensing decision,” Kim said in an interview with Bloomberg News.

Standard General asked the agency in a statement Monday to reconsider its decision and allow a vote on the deal by the full commission. 

The FCC declined to comment. Tegna, which operates 64 TV stations, said in a regulatory filing it is evaluating its options. The shares closed down 19% to $17.71 on Monday. Standard General is offering $24 a share for the company. 

Read full story in Bloomberg

Bloomberg | by Todd Shields