On Monday, Discovery Communications acquired Scripps Network Interactive for $14.6 billion to include debt, or $90 per share. Discovery will scoop up Scripps in a cash-and-stock deal valued at $14.6 billion, the media company announced Monday. Royal Bank Of Canada set a $32.00 price target on Discovery Communications and gave the company a "buy" rating in a report on Monday, June 12th. If you are accessing this piece of content on another website, it was illegally copied and reposted in violation of USA & global trademark and copyright legislation. Channels such as the flagship Discovery Channel and TLC are based in Los Angeles and many company executives are in New York City, the spokeswoman said.
Combined, Discovery and Scripps will have almost 20% share of ad-supported pay-TV audiences in the US. Under the terms of the deal, Scripps CEO Ken Lowe would join the board of the combined company.
In the U.S., the combined firm will serve almost 20 percent of ad-supported pay-TV audiences, according to a joint statement.
The combined company is also expected to deliver 350 million U.S. dollars (£266.8 million) worth of cost savings.
After the transaction is completed, Scripps' shareholders will own approximately 20 percent of Discovery and Discovery's shareholders will own approximately 80 percent. "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". Investors seem to have mixed feelings as shares of Discovery have fallen 7% in early morning trading while Scripps stock has risen about 0.65% in reaction to the news.
"In a few years, the TV business will likely have been reshaped dramatically", Business Insider said.
"While we believe the two companies are likely better positioned together, rather than apart, the longer-term issues facing the industry still remain", noted analyst John Janedis of Jefferies.
By combining the content of each company, Discovery has more power to create "skinny bundle" options for viewers, which offer fewer channels and are cheaper for people unwilling to shell out for a big, monthly cable bill. Discovery said its net income fell 8 percent to $374 million, or 64 cents per share, down from 66 cents.
The goal is to increase Discovery's depth and reach.
Cowen's Doug Creutz and Stephen Glagola call Discovery's acquisition of Scripps Networks Interactive "somewhat pricey". Retirement Systems of Alabama boosted its stake in Scripps Networks Interactive by 0.7% in the second quarter.style="text-align: center;"