Will Discovery Acquire Scripps Networks Interactive?

by , Dec 11, 2013, 3:42 PM
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Fresh reports over the acquisition of Scripps Networks Interactive, owners of Food Network and HGTV, by Discovery Communications spiked Scripps’ stock on Wednesday.

Midday trading had Scripps stock up 7.5% to $80.89; Discovery Communications was down 0.6% to $84.69. One of the smaller cable TV networks groups, Scripps Networks Interactive, had been the fodder of takeover talks for some time.

On Wednesday, analyst Michael Nathanson of MoffettNathanson Research wrote that a possible takeover could save $250 million in operational costs with the deal. But he did not think Discovery would gain an advantage in adding more channels when it came to negotiating better subscriber rates from cable, satellite, telco and other TV providers.

Another media analyst, Alan Gould of Evercore, believes such a deal would give Discovery Communications 18% of all advertiser-supported pay TV viewing in the U.S. Earlier this year, Discovery -- with its 10 networks -- said it controlled a 10.7% share of ad-supported pay TV.

In the most recent November period, Scripps HGTV (Home & Garden TV) network was up 8% to a Nielsen 1.143 million average prime-time viewers -- a top 20 cable network in the viewing measure. Food Network was slightly down in the month -- 3%, to a Nielsen 986,000 average prime-time viewers.

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