Judge Eases Some Provisions Of His Order Blocking Nexstar-Tegna Merger

A federal judge eased some of the restrictions on his order that at least temporarily blocked Nexstar‘s merger with Tegna, but he also extended the freeze on the transaction for another week.

U.S. District Judge Troy Nunley will allow Nexstar to conduct debt service and repayment obligations, comply with Securities and Exchange Commission reporting requirements, and make appointments to keep Tegna operating, among other things. In the case of the latter, Nexstar is still prohibited from installing its own company employees or officers. Nexstar also will be allowed to set thresholds for contract approval, expenditure authorization and other financial limits, similar to how Tegna operated before the deal closed on March 19.

Shortly after securing regulatory approval on that date, Nexstar announced that it had closed its deal to acquire Tegna, creating a broadcast giant of around 260 stations across the country. But in the previous day, DirecTV and a group of state attorneys general filed lawsuit challenging the transaction on antitrust grounds.

Nunley granted a 14-day temporary restraining order on March 27, concluding that DirecTV has established a “likelihood of success on the merits” of its claim that the merger violated antitrust laws. The cases were later consolidated with the claims of the state attorneys general, which include California and New York.

Nexstar is challenging the judge’s decision, but had argued that because the transaction had closed, it created “immediate operational harm to Tegna and Nexstar, regulatory conflicts, and a governance vacuum.”

Earlier this week, Nunley heard arguments on whether to grant the plaintiffs a permanent injunction, which would block the merger indefinitely. He has yet to issue a ruling, but in his order on Friday, extended the TRO another week. The judge wrote that he found “good cause” to extend the restraining order “to maintain the status quo and prevent irreparable harm while the court prepares its ruling on whether a preliminary injunction should issue.”