Discovery Sells $6.3 Billion of Bonds to Fund Scripps Purchase

Updated on
  • Debt offering follows sales from Apple, IBM on Tuesday
  • Tech, media, telecom companies dominated issuance this week

Discovery Communications Inc. sold $6.3 billion of debt to help finance its takeover of Scripps Networks Interactive Inc. in a week where technology, media and telecom companies have dominated supply.

The cable TV content provider sold notes in six parts, according to data compiled by Bloomberg. The longest portion, $1.25 billion of bonds maturing in 2047, yields 2.55 percentage points above Treasuries, down from initial talk of 2.8 percentage points, said a person with knowledge of the matter, who asked not to be identified because the deal is private.

The sale came amid a busy week for issuance following the U.S. Labor Day holiday, with Apple Inc. and International Business Machines Corp. leading the charge. Apple brought a $5 billion bond offering Tuesday to fund share buybacks and dividends, and IBM sold $3 billion of notes.

The $11.9 billion cable combination joins channels such as Discovery’s Animal Planet and Oprah Winfrey Network with Scripps’s Food Network and HGTV. The added programming will strengthen Discovery’s international reach and expand its distribution options, Chief Executive Officer David Zaslav said in July, as consumers drop cable subscriptions in favor of streaming services like Netflix.

Plans call for Discover to pay with a combination of cash and stock and assume Scripps net debt of $2.7 billion, bringing the acquisition’s total value to $14.6 billion. The combination is expected to close early next year.

Goldman Sachs Group Inc., Citigroup Inc. and Credit Suisse Group AG were lead managers for the bond sale, Silver Spring, Maryland-based Discovery said in a statement Thursday.

— With assistance by Allan Lopez, and Rizal Tupaz

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