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Discovery said to emerge as sole bidder for Scripps Networks
[LOS ANGELES] Discovery Communications Inc is offering about US$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 US$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 US 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 US$3.4 billion last year.
Discovery's offer was said to be 70 per cent cash and 30 per cent in stock, according to the Wall Street Journal.
Scripps rose as much as 3.5 per cent to US$86.99 in extended trading. Including the late trading, it has gained almost 30 per cent since July 18, the day before it was reported the company was in sale talks. Discovery, based in Silver Spring, Maryland, rose 2.5 per cent to US$26.58 at the close of regular trading in New York. Viacom was up 2.1 per cent to US$35.09.