Dis­cov­ery to Buy Scripps for $11.9 B

The Economic Times - - Around The World -

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.

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