Scripps Interactive Rises on Report Discovery Weighs BidAndy Fixmer
Scripps Networks Interactive Inc., owner of HGTV and the Food Network, rose the most in more than a year after Variety reported Discovery Communications Inc. may bid for the company.
Scripps Networks, based in Knoxville, Tennessee, climbed as much as 7.4 percent, the biggest intraday increase since May 2012. The shares were up 7 percent to $80.55 at 9:42 a.m. in New York. As of yesterday, its market value was almost $11 billion.
Discovery, based in Silver Spring, Maryland, may make an offer for Scripps Interactive, Variety reported, citing an unidentified person who was at a board meeting yesterday where the idea was discussed. The publication didn’t provide possible terms.
Michelle Russo, a spokeswoman for Discovery, declined to comment, as did Mark Kroeger, a spokesman for Scripps Networks Interactive. Discovery operates cable television channels including Animal Planet and TLC.
Investors may be getting ahead of themselves, Jason Bazinet, an analyst at Citigroup Inc., wrote in a research note. A takeover of Scripps is unlikely because Discovery is more focused on international markets, he said, cutting his rating of Scripps to sell from neutral.
Scripps Interactive has two classes of stock, with 94 percent of the voting shares held by the Edward W. Scripps Trust, according to an April 8 regulatory filing.
Discovery, led by Chief Executive Officer David Zaslav, gained 1.7 percent to $86.64. As of yesterday’s close, the company’s market value was more than $30 billion.
Cable TV billionaire John Malone controls 29 percent of Discovery’s voting rights, while publisher Advance/Newhouse Communications has 25 percent, according to an April 2 filing.
Other bidders might surface for Scripps, which may be a complementary business for 21st Century Fox Inc., Time Warner Inc. or Viacom Inc., said Eric Handler, an analyst at MKM Partners, in a research note.