Tribune Media (NYSE: TRCO) has terminated its $3.9-billion deal to be bought by Sinclair Broadcast Group, (NASDAQ: SBGI) the company said on Thursday, after regulators objected to the acquisition that had received support from U.S. President Donald Trump.
Tribune filed a lawsuit against Sinclair, the largest U.S. broadcast station owner, alleging material breach of contract 15 months after the merger was first announced.
"To maintain control over stations it was obligated to sell, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the FCC over regulatory requirements," Tribune said.
The Federal Communications Commission (FCC) said in July that 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, which owns 192 stations, said in May 2017 that it planned to acquire Chicago-based Tribunes 42 TV stations in 33 markets in a deal that would significantly expand its reach.
Advocacy group Free Press said in an FCC filing in August 2017 that Sinclair forces its stations to air pro-Trump propaganda and then seeks favors from the Trump administration.
FCC Chairman Ajit Pai told Congress after Trump's tweet that he stood by his decision to refer the issue to a hearing.
Tribune CEO Peter Kern told employees in an email reviewed by Reuters that it was not clear what was next for Tribune.
Shares in TRCO gained 79 cents, or 2.3%, to $34.50, while those for SBGI slid $1.10, or 4.1%, to $26.00
