E.W. Scripps’ board unanimously rejected Sinclair’s unsolicited takeover bid, saying it was not in the company’s or shareholders’ best interests.
The $622 million acquisition proposal would have given the Scripps investors about 12.7% of the combined company. Sinclair, which already owns 8.2% of Scripps, made the bid last month to buy out shareholders at $7 per share, offering a 200% premium to Scripps’ 30-day volume-weighted average price.
“The board is committed to acting in the best interests of all Scripps shareholders as well as the company’s employees and the many communities and audiences it serves across the United States,” Kim Williams, the chair of Scripps’ board, said. “After careful consideration, Scripps’ board determined that Sinclair’s unsolicited acquisition proposal is not in the best interests of Scripps and its shareholders. The board nonetheless remains open to evaluating opportunities to enhance shareholder value and will continue to consider any course of action, including any acquisition proposal, that is in the best interest of all shareholders.”
In a statement on Wednesday, Sinclair expressed its disappointment in Scripps’ decision, arguing the board rejected its proposal without engaging.
“Our proposal was based on previous discussions and was responsive to concerns about Scripps’ communities, employees and shareholders. It delivers significant strategic and financial benefits for both companies and all shareholders, and represents a substantial premium over both Scripps’ unaffected and current share price,” the statement continues. “We call on Scripps to engage with us regarding our proposal. We believe Scripps’ shareholders deserve a full and fair evaluation of this opportunity.”
While Scripps rejected the larger rival’s bid, the company said it remained open to evaluating opportunities to enhance shareholder value, including any future proposals.
Scripps owns a portfolio of 61 television stations in 41 markets in addition to national networks like Court TV and Ion. Sinclair operates and/or provides services to 185 TV stations in 85 markets. Under Sinclair’s proposal, the combined company would have a market capitalization of $2.9 billion, according to Sinclair.
The merger rejection comes as another local TV giant, Nexstar Media Group, looks to acquire its rival Tegna in a $6.2 billion transaction. Under current regulation of the federal cap on station ownership, a single owner may not control stations reaching more than 39% of U.S. households. A Nexstar-Tegna merger would double that reach. The proposed Sinclair-Scripps merger would have also extended past the 39% limit.
