U.S. broadcaster Sinclair has offered to buy E.W. Scripps in a cash-and-stock deal that values its smaller rival at $538 million, as cord-cutting and competition from streaming services lead to consolidation in the media industry.
The bid, disclosed in a regulatory filing Nov. 24, follows months of talks between the companies, as well as a regulatory disclosure last week that Sinclair has an 8.2% stake in Cincinnati-based Scripps.
News 5 Cleveland WEWS, a news partner of the Akron Beacon Journal and Canton Repository, is a Scripps station that could be impacted by the deal if it goes forward.
The $7-per-share offer for the remaining shares – consisting of $2.72 cash and $4.28 in stock – represents a 70% premium to Scripps’ last close, Reuters calculations show.
Shares of Scripps rose 6.5%, while those of Sinclair fell nearly 2%.
Sinclair has been looking to scale up as the U.S. media industry struggles with declining traditional TV audiences, a weak advertising environment and intensifying competition from streaming giants like Netflix.
Doubts emerged Nov. 24 over rival broadcaster Nexstar’s $3.54 billion offer for Tegna, as U.S. President Donald Trump criticized a proposal to lift the current cap on local television station ownership, which is necessary for the acquisition.
Sinclair said its deal for Scripps could close under current ownership rules with limited divestitures of TV stations.
Scripps said its board will review the proposal. Descendants of founder Edward Scripps control about 93% of the company’s common voting shares, according to the company’s annual report.
The combined company would feature an independent board with seats allocated based on ownership, include representation from the Sinclair and Scripps families, and adopt joint editorial standards overseen by an independent ombudsman, Sinclair said.
Upon the deal closing, Scripps’ shareholders would own about 12.7% of the combined entity, Sinclair said.
The new, publicly traded company would retain Sinclair’s dual-class structure.
This article originally appeared on Akron Beacon Journal: Sinclair offers to buy E.W. Scripps in bid to expand broadcast reach
Reporting by Anhata Rooprai, Reuters / Akron Beacon Journal
USA TODAY Network via Reuters Connect
