Discovery Is Said to Be Sole Remaining Bidder for ScrippsBy and
Offer of about $90 a share drives Viacom from the talks
Scripps is said to be moving forward on talks with Discovery
Discovery Communications Inc. is offering about $90 a share for Scripps Networks Interactive Inc., according to people with knowledge of the matter, closing in on a potential blockbuster cable TV merger worth about $12 billion.
The offer was high enough to force Viacom Inc. to abandon its own efforts to acquire the owner of HGTV and the Food Network, said the people, who asked not to be identified because the discussions are private.
The companies are still negotiating some unspecified issues and are unlikely to reach a definitive agreement until next week, one of the people said. An acquisition by Discovery, the owner of Animal Planet and TLC, would combine two cable TV programmers that are leaders in so-called unscripted programming.
Buying Scripps, with its popular programming on food, travel and home repair, could help Discovery cut costs, gain negotiating leverage with distributors and expand internationally as its U.S. TV businesses face new pressures. TV network owners are grappling with a decline in subscriptions for cable and satellite services as they lose viewers to online video services and social networks.
Knoxville, Tennessee-based Scripps represented a big leap for Viacom, which has been struggling with shrinking ratings at some of its networks and losses in its film division, as well as trying to lower debt.
In addition, there were some aspects of Discovery’s proposal, beyond price, that were compelling to Scripps, according to one of the people. Family members associated with Scripps Networks control 92 percent of the company’s voting rights. Revenue there totaled $3.4 billion last year.
Discovery’s offer was said to be 70 percent cash and 30 percent in stock, according to the Wall Street Journal.
Scripps rose as much as 3.2 percent to $86.75 in early trading Thursday. It has gained almost 30 percent since July 18, the day before it was reported the company was in sale talks. Discovery, based in Silver Spring, Maryland, fell 1.4 percent to $26.20.
— With assistance by Christopher Palmeri