Discovery to Buy Scripps for $11.9 B
New York: Discovery Communications agreed to buy Scripps Networks Interactive for $11.9 billion in a bet that uniting ownership of cable channels like Animal Planet and HGTV will help the company adapt to the changing television landscape.
Discovery will acquire Scripps for about $90 a share and assume longterm debt of $2.7 billion, bringing the total price of the equity value plus liabilities to $14.6 billion, according to a statement on Monday. The price represents a 34% premium over Scripps’ closing price of $67.02 on July 18, the day before news of the companies’ talks became known.
Discovery, based in Silver Spring, Maryland, is grappling with shrinking audiences at some US channels — including the Discovery channel and Animal Planet — as consumers drop cable subscriptions and get more entertainment online from Netflix and others. The deal combines two companies that specialise in so-called unscripted programming, focused on real-life adventures, travel, wildlife and home. With Scripps, Discovery gets the home-improvement channel HGTV, where hits like “Property Brothers” and “Fixer Upper” have made it one of the more popular cable networks. The combined company will have almost 20% of the ad-supported pay-TV viewership in the US, according to the statement. Buying Scripps could also help Discovery boost its international sales, which currently account for half of its annual revenue.