July 31, 2017 - 18:23 AMT
PanARMENIAN.Net - Discovery Communications Inc. agreed to buy Scripps Networks Interactive Inc. 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, Bloomberg says.
Discovery, one of billionaire John Malone’s key holdings, will acquire Scripps for about $90 a share and assume long-term debt of $2.7 billion, bringing the total price of the equity value plus liabilities to $14.6 billion, according to a statement Monday, July 31. The price represents a 34 percent 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 U.S. 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 specialize 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 percent of the ad-supported pay-TV viewership in the U.S., according to the statement. Buying Scripps could also help Discovery boost its international sales, which currently account for half of its annual revenue. Knoxville, Tennessee-based Scripps owns an interest in Polish TV operator TVN and is expanding HGTV to new countries.
“This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels including short-form, direct-to-consumer and streaming platforms,” Scripps Chief Executive Officer Kenneth W. Lowe said in the statement.