Discovery aims for calm poke with Scripps Network bid

NEW YORK (Reuters) – Discovery Communications Inc is appropriation Scripps Networks Interactive Inc for $11.9 billion in a understanding approaching to boost a company’s negotiating precedence as it seeks new audiences.

The acquisition, announced on Monday, brings together Scripps’ mostly female-focused lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery’s Animal Planet and Discovery Channel, whose viewers are essentially male.

Despite expectations of $350 million in sum cost synergies, many analysts questioned how a sum association would contest prolonged tenure as viewers cut cords to wire providers and as promotion and ratings decline.

Discovery shares finished unchanging trade down 8.2 percent during $24.60 while those of Scripps finished adult 0.6 percent during $87.41.

Discovery is profitable 70 percent money and 30 percent batch for Scripps. The sum cost of a understanding is $14.6 billion including debt.

“While we trust a dual companies are expected improved positioned together, rather than apart, a longer-term issues confronting a attention still remain,” wrote John Janedis, an researcher during Jefferies, in a note on Monday.

Both Discovery and Scripps reported quarterly gain on Monday that reflected a hurdles confronting U.S. media companies. Scripps missed a second entertain ad superintendence and lowered a full-year estimates, and Discovery reported prosaic promotion and reduce associate revenue.

U.S. radio networks and wire providers are underneath vigour as some-more viewers watch shows and cinema on phones and tablets. There is also increasing foe for viewers from streaming services such as Netflix Inc and Inc.

Five of a largest U.S. compensate TV providers posted subscriber waste during a second quarter.

The sum company’s incomparable programming line-up competence give it an advantage in negotiations for inclusion in spare bundles, or economy-priced wire packages that offer fewer channels than a customary contract.

After a merger, a association will offer 300,000 hours of calm and constraint about a 20 percent share of ad-supported wire audiences in a United States, Discovery pronounced on an researcher call Monday morning.

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

“The transaction supports and accelerates Discovery’s focus from a linear TV-only association to a heading calm provider opposite all screens and services around a world,” David Zaslav, Discovery’s arch executive, told investors.

The sum association would also have some-more flesh in negotiations with wire and other distributors when contracts come adult for renewal, executives said.

By adding Scripps programming, Discovery could also launch a possess “skinny bundle” of networks during a low cost, executives said.

The sum association would be home to 5 of a tip wire networks for women with some-more than a 20 percent share of women prime-time viewers in a United States, according to Discovery.

Discovery will weigh a Scripps channels, as it has a own, to figure out if any could be web-based, Zaslav pronounced on a call.

Scripps has been deliberate a takeover aim given a Scripps family trust, that tranquil a company, was dissolved 5 years ago.

Under a terms of a deal, Scripps CEO Ken Lowe would join a house of a sum company.

The understanding requires regulatory and shareholder approvals. Major shareholders including wire lord John Malone, Advance/Newhouse Programming Partnership and members of a Scripps family, support a deal, a companies said.

Discovery had attempted unsuccessfully twice before to buy Scripps. Discovery outbid Viacom Inc for Scripps, Reuters reported initial final week.

Guggenheim Securities and Goldman Sachs served as financial advisers to Discovery. Allen Co LLC and J.P. Morgan Securities served as financial advisers to Scripps.

Evercore Group served as financial confidant to a Scripps family.

Editing by Jeffrey Benkoe and Steve Orlofsky

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>