Federal Communications Commission Chairman Ajit Pai said on Monday he has "serious concerns" about Sinclair Broadcast Group proposed $3.9 billion acquisition of Tribune Media, an announcement that could scuttle the deal.
Pai said in a statement that evidence suggested the divestiture of certain television stations "would allow Sinclair to control those stations in practice, even if not in name, in violation of the law." Sinclair, the top U.S. television broadcast group, did not immediately comment.
The transaction has come under harsh criticism from many Democrats and some state attorneys general because it would lead to significant consolidation.
Tribune shares slid 15.7 percent at $32.49 and Sinclair fell 4.8 percent at $31.35.
Pai called for a hearing before an administrative judge. In prior cases, when the FCC referred matters to an administrative judge, the parties have opted not to pursue the deal.
Gigi Sohn, a top aide to former FCC chairman Tom Wheeler, said "it's widely recognized that when something is set for a hearing that the deal is not going to survive."
Sinclair, which owns 192 stations, said in May 2017 it planned to acquire Chicago-based Tribunes 42 TV stations in 33 markets.
In April, Sinclair said it would sell 23 TV stations to obtain the necessary regulatory approvals for the Tribune transaction.
Sinclair, based in Hunt Valley, Maryland, has said that if the deal was approved it would reach nearly 59 percent of the nations television households.