FCC raises concerns about Sinclair-Tribune deal; shares skid

WASHINGTON (Reuters) – Federal Communications Commission Chairman Ajit Pai said on Monday he had "serious concerns" about Sinclair Broadcast Group Inc.'s SBGI.O ) proposed $ 3.9 billion acquisition of Tribune Media Co ( ] TRCO.N ), a surprise move which could potentially scuttle the deal and feel shares of both companies tumbling.

Pai, Republican, said It was suggested that the proposed divestiture of certain television stations "would allow Sinclair to control those stations in practice, even if not in name, in violation of the law."

Pai, whom Democrats have accused Sinclair, propos de la propos de la traduction de l'action de l'action de l'action de l'action de l'action au The move could result in a lengthy delay and could effectively kill the deal, as in other mergers referred for administrative proceedings.

Sinclair, the top U.S. television broadcast group, said in a statement late Monday it was "shocked and disappointed" by the announcement and denied it was not in compliance with FCC rules. The company said it was "prepared to reach a certain conclusion" and looked "to finalize our acquisition of Tribune Media."

Tribune shares closed down 16.7 percent to $ 32.12, while Sinclair dropped 11.7 percent to $ 29.10.

Tribune declined to comment. Pai and Sinclair have previously denied the Democrats' accusations. Democrats also said the FCC's general inspector is probing the allegations.

Sinclair, which owns 192 stations, said in May 2017 that it planned to acquire Chicago-based Tribune's 42 TV stations in 33 markets.

In April, Sinclair said it would sell 23 TV stations to obtain the necessary regulatory approvals. It needs FCC permission to own more than one station in some markets.

Sinclair would like to continue to raise questions about the issues it raises in the United States.

The deal has come in for criticism that it would lead to significant TV station consolidation in the United States by many Democrats and by the attorneys general of a few states in which the FCC to reject the deal.

Sinclair, based in Hunt Valley, Maryland, said it would be approved, it would reach nearly 59 percent of the nation's television households. Sinclair said Monday the deal "will be unprofitable."

A majority of the FCC voted Monday to approve the draft order circulated by Pai's office the transaction for a hearing, a person briefed on the matter said.

"Gigi Sohn, a top aide to train FCC Chairman Tom Wheeler, said," It's a lot of things that are not going to survive.

FCC Commissioner Jessica Rosenworcel, a Democrat, said that a "custom built" to support Sinclair, "the agency will finally take a look at its proposed merger with Tribune." Reuters, said the deal reached an outcome that "includes a potential element of misrepresentation or lack of candor" that must be resolved before the FCC gives it a go-ahead.

That could amount to "misconduct," the order said. The Justice Department's separate review of the merger is still ongoing, the department said Monday.

The Draft Order Raised Questions About the Divison of Stations in Dallas and Houston, published by Sinclair on the Divination of WGN-TV in Chicago.

Sinclair responded to these questions in the following manner: "Completely transparent about every aspect of the proposed transaction."

Two FCC officials briefed on the matter said the language in the order made it extremely unlikely that Sinclair would be able to proceed with the merger as planned.

The order "could also be put into place in the open market," said Gene Kimmelman, president of the advocacy group Public Knowledge.

Advocacy group Free Press said Sinclair forces stations to "air pro-Trump propaganda" – a charge it denies.

President Donald Trump has defended the conservative-leaning Sinclair, tweeting in April that the company was "far superior to CNN."