E.W. Scripps Stock Spikes on News of Merger, Spinoff
Shares of E.W. Scripps spiked 8 percent Thursday, a reaction to an announcement late Wednesday that it will split its print assets from its broadcasting businesses, a move that is similar to those made by Time Warner, News Corp and other media companies.
E.W. Scripps said the plan involves a partnership with Journal Communications, a media company in Milwaukee.
Under the arrangement, Journal Media Group will be created to combine the print — and some digital — assets of both companies.
At the same time, the TV and radio broadcast assets of Journal Communications will be combined with those from E.W. Scripps.
While the news had shares of E.W. Scripps climbing $1.69 to $21.68, shares of Journal Communications soared 24 percent to $10.88.
After the deal is approved and finalized next year, E.W. Scripps will have the fifth-largest independent television station group in the U.S. and it will reach 18 percent of the nation's households, the companies said. Journal Media will have newspapers and other publications in 14 markets.
Scripps shareholders will get a special dividend of $60 million and they'll own 69 percent of the broadcast company and 59 percent of the newspaper company. Scripps will retain its Scripps National Spelling Bee.
After the transaction, E.W. Scripps will have about 4,000 employees and annual revenue of more than $800 million. Journal Media will have 3,600 employees and more than $500 million in annual revenue and no debt.
"In one motion, we're creating an industry-leading local television company and a financially flexible newspaper company with the capacity and vision to help lead the evolution of their respective industries," said E.W. Scripps CEO Rich Boehne.