Scripps Board Unanimously Rejects Sinclair’s Acquisition Proposal
The board of E.W. Scripps Co. has made a unanimous decision to reject the unsolicited acquisition proposal put forth by Sinclair, the second-largest TV station owner group in the U.S. This announcement was made by Scripps on Tuesday.
Sinclair had made an offer of $7 per share, a combination of cash and stock, for the remaining Scripps shares that it does not already own. Prior to this, Sinclair had acquired a 9.9% stake in Scripps. This move by Sinclair came amidst Nexstar Media Group’s $6.2 billion deal for Tegna, aimed at expanding Nexstar’s reach as the largest TV station owner group in the country.
In a statement released on December 16, Scripps stated, “The Scripps board, after a thorough review and evaluation with its financial and legal advisors, has determined that Sinclair’s offer is not in the best interests of the company and its shareholders.”
Representatives for Sinclair have not yet responded to requests for comment.
Kim Williams, chair of Scripps’ board, expressed, “The board is dedicated to acting in the best interests of all Scripps shareholders, employees, and the communities and audiences it serves across the U.S. After careful consideration, the board concluded that Sinclair’s unsolicited acquisition proposal is not in the best interests of Scripps and its shareholders. However, the board remains open to exploring opportunities to enhance shareholder value and will consider any action that benefits all shareholders.”
Sinclair currently operates and provides services to 185 TV stations in 85 markets, while Scripps has over 60 stations in 40-plus markets. Sinclair predicts that upon completion of the Scripps acquisition, Scripps shareholders would own approximately 12.7% of the combined entity.
In a filing with the SEC, Sinclair addressed the FCC’s 39% ownership limit, stating, “We are confident that under existing rules, including the national cap, the transaction with Scripps can be finalized promptly with minimal divestitures.”
Under Sinclair’s proposal, the merged Sinclair-Scripps company would have a market capitalization of $2.9 billion, based on a 7:1 ratio of enterprise value to EBITDA. Sinclair estimates that the combined company would achieve approximately $325 million in cost synergies.
