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The stock of Discovery jumped more than 5 percent before the stock market opened on Thursday after a CNBC report suggested that the cable networks group behind the likes of Discovery Channel, TLC, Animal Planet and HGTV could be ready to sell to CBS Corp. or CBS-Viacom, if the two companies recombine.
Discovery, however, in a statement said it was not interested in a sale. The CNBC report, which cited unnamed sources, said that the firm “would be interested in selling to CBS or a combined CBS-Viacom.”
“The CNBC story is inaccurate. Discovery is not for sale,” David Leavy, Discovery’s chief corporate operations officer said in a statement. “We remain extremely confident in our growth strategy in the U.S. and globally as we continue to build the leading portfolio of superfan brands in every market around the world.”
CNBC cited sources as saying that Discovery was interested in a deal with CBS or CBS-Viacom and that Viacom and CBS vice chair Shari Redstone, whose family’s National Amusements owns controlling stakes in both companies, was interested in following up a potential deal recombining the two with a deal for Discovery or such potential other targets as Sony Pictures or MGM. The report emphasized that no talks between Discovery and CBS have taken place.
A representative for Redstone declined to comment. CBS couldn’t immediately be reached for comment. Discovery is led by CEO David Zaslav, who last year extended his contract with the company through 2023.
The CNBC report came ahead of a regularly scheduled CBS board meeting that is expected to include latest discussions about potential M&A strategies and the process of selecting a new CEO.
CBS and Viacom had last year reached agreement on deal terms, but couldn’t settle on the management composition of the combined company. In September, longtime CBS chairman and CEO Leslie Moonves had to exit amid sexual harassment allegations, with Joe Ianniello taking over the role of acting CEO.
Redstone and National Amusements have long considered a potential two-step move to increased scale and market power. “Ms. Redstone and Mr. Moonves discussed, and agreed, that a combination of CBS and Viacom would benefit both companies’ stockholders, providing each company with greater scale as needed for success in today’s media and entertainment landscape, and better positioning the companies for a larger transaction in which the combined entity could fetch an attractive premium that neither CBS nor Viacom alone could command,” NA said in May last year. “Ms. Redstone told Mr. Moonves that NA would consider relinquishing its controlling interest in the context of such a transaction.”
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