Television broadcaster Sinclair, Inc. has made an unsolicited offer to acquire all outstanding shares of the E. W. Scripps Company for $7 per share as part of a bid to merge with the company, it disclosed in a regulatory filing on Monday.
The move comes about a week after Sinclair said it purchased an 8.2 percent stake in the company through a large purchase of common stock, a holding that has now increased to 9.9 percent, documents filed with the U.S. Securities and Exchange Commission revealed.
Sinclair owns or operates more than 180 local television stations across the country, while Scripps has more than 60 stations in its portfolio. Sinclair is already one of the largest independent owners of ABC, CBS, Fox and NBC-affiliated TV stations; a combination with Scripps would grow its direct ownership of TV stations even larger, rivaling that of Nexstar Media Group. Nexstar is in the process of acquiring TEGNA through a separate transaction.
A combination of Scripps and Sinclair might also put other assets under the ownership of one company: Both operate streaming and multicast networks like Ion, Court TV, Scripps News, Laff, Comet, Charge, Roar and The Nest. Sinclair also owns the Tennis Channel.
Shares of Sinclair and Scripps were trading lower on Monday, nearly one day after President Donald Trump wrote in a social media post that he was opposed to reforming local TV ownership rules if it meant broadcast networks ABC and NBC could consolidate. Broadcast networks are prohibited from merging under federal regulations that are related, but otherwise separate, to local TV station ownership restrictions.
A merger of Scripps and Sinclair would require the Federal Communications Commission (FCC) to raise the current ownership cap or eliminate it outright. Currently, local TV station broadcasters are prohibiting from directly owning a collection of stations that reach more than 39 percent of the country. Sinclair and Nexstar use loopholes in the law to overcome this restriction, operating TV stations that are technically licensed to third party companies like Mission Broadcasting, White Knight Broadcasting, Cunningham Broadcasting and Deerfield Media.
Scripps previously said it would weigh unsolicited offers from others based on its fiduciary duty to stockholders, but would protect the company from “opportunistic” efforts by Sinclair and others.
“The company’s board has and will continue to evaluate any transactions and other alternatives that would enhance the value of the company and would be in the best interest of all company shareholders,” a spokesperson for the company said.
In a statement to reporters on Monday, Scripps reaffirmed its commitment to weigh offers in line with its fiduciary duties, but said it wouldn’t directly comment on Sinclair’s offer until its board of directors has reviewed it.
