Scripps Rejects Sinclair Unsolicited Acquisition Offer
The Board of E.W. Scripps Co. 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 United States. This announcement was made by Scripps on Tuesday.
Sinclair had offered $7 per share (a combination of cash and stock) to acquire the remaining stock of Scripps that it does not already own. Sinclair had previously acquired a 9.9% stake in Scripps. This move by Sinclair came in the midst of Nexstar Media Group’s $6.2 billion deal to acquire Tegna, which would further expand Nexstar’s reach as the largest TV station owner group in the U.S.
In a statement released on December 16, Scripps stated, “The Scripps board, after thorough review and consultation with financial and legal advisors, has determined that Sinclair’s offer is not in the best interests of the company and its shareholders.”
Representatives from Sinclair did not immediately respond to requests for comment.
Kim Williams, the 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 served across the U.S. After careful consideration, the board concluded that Sinclair’s 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 actions that benefit 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. If the Scripps acquisition were to proceed, Scripps shareholders would own approximately 12.7% of the combined entity.
In its SEC filing, 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 completed efficiently with minimal divestitures.”
Under Sinclair’s proposal, the combined Sinclair-Scripps company would have a market capitalization of $2.9 billion, based on a 7:1 ratio of enterprise value to EBITDA. Sinclair estimated that the unified company would achieve approximately $325 million in cost synergies.
