Discovery Takes Command in Bid for Scripps
The deal could be worth over $12 billion.
Scripps Networks Interactive has entered into exclusive talks with Discovery Communications in a quest to hammer out a merger agreement, a development that leaves Viacom out of the equation, for now.
Discovery could agree as early as next week to pay more than $12 billion for Scripps, home to HGTV, Food Network and the Travel Channel, a person familiar with the negotiations told The Hollywood Reporter on Wednesday.
Investors have known for more than a week that Scripps was looking for a merger and have bid the stock 27 percent higher since July 18. On Wednesday, the stock was 3 percent higher to $84.07 during the regular session then it gained an additional 2 percent after the closing bell, when Reuters was the first to report this latest development.
Viacom had also been in the mix as a potential partner for Scripps, though analysts have noted that the conglomerate's younger skewing channels like Comedy Central, MTV, VH1 and Nickelodeon might have been an awkward fit with the older-skewing Scripps channels.
The Scripps channels, though, are a near-perfect fit with Discovery, which includes Animal Planet, OWN, TLC and, of course, its namesake Discovery Channel. At the very least, a combined Discovery-Scripps could have more pricing power with cable TV providers, and some analysts see the merged company offering a skinny bundle of its channels.
Discovery, partially controlled by billionaire media mogul John Malone, has been flirting with Scripps for several years and, in fact, it is at least the third time the rival companies have held merger talks.
At the closing bell on Wednesday, Scripps had a market cap of $10.9 billion, compared with Discovery's $15.6 billion. Viacom's market cap was $14 billion.
Viacom had no comment Wednesday, while Discovery and Scripps were unavailable for comment.