Frederick M. Brown / Stringer
Darrell Miklos, Jerry Roberts and executive producers Ari Mark and Darryl Frank of the docuseries ‘Cooper’s Treasure’ speak onstage during the Discovery Channel portion of the 2017 Winter Television Critics Association Press Tour.
This marks at least the third time that Discovery, whose shareholders include cable magnate John Malone, has tried to buy Scripps. Discovery outbid Viacom for Scripps, which Reuters first reported Wednesday.
Investors are largely positive on the deal for the synergies the combined company will see and the leverage it will have with pay TV partners. Since news of Discovery’s talks started, Discovery is up almost 3 percent, while Scripps is up almost 30 percent.
But many analysts question how the combined company will compete long-term as viewers keep cutting cords to cable providers and advertising and ratings decline.
“If there were no secular concern, this deal would be a slam dunk,” wrote Barton Crockett an analyst at FBR Capital Markets, on July 27. While ratings for both companies have been solid, “investors don’t trust that this can continue, and we’re not sure what turns that fear around.”
Discovery is paying 70 percent cash and 30 percent stock for Scripps.
The agreement is valued at about $90 per share, based on Discovery’s Friday, July 21, closing price.
The purchase price represents a premium of 34 percent to Scripps’ share price as of Tuesday, July 18, 2017. The deal is expected to close by early 2018.
—CNBC contributed to this report.