Nexstar shares fall as judge halts Tegna merger

Investing.com -- Shares of Nexstar Media Group are trading roughly 9% lower on Monday after a federal judge ruled that the television broadcaster must pause its merger with rival TV station owner Tegna Inc.

US District Judge Troy L. Nunley in Sacramento granted DirecTV's request to halt the deal, which the companies closed last week. Nunley ruled Friday that the companies must stop further efforts to combine while the lawsuit plays out.

DirecTV and a group of state attorneys general led by California are challenging the merger on antitrust grounds.

The companies "do not contest this merger will increase Nexstar's bargaining leverage to extract higher fees," Nunley wrote in his 24-page order.

Nunley said he was persuaded by DirecTV's "assertion that despite defendants' claim the rise of streaming services and 'cord-cutting' will create a downward pressure on retransmission rates, Nexstar's CEO Perry Nook recently told investors the opposite." The reference is to fees local broadcasters charge cable companies for content, which can lead to higher bills for consumers.

Nunley set a hearing for April 7 on whether to keep the pause in place pending a full trial.

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