Sinclair makes full takeover bid for Scripps
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Sinclair on Monday proposed buying out the remainder of Scripps' shares, after spending the last week increasing its position in the company to 9.9%.
Why it matters: A takeover bid made sense when it appeared likely that the Federal Communications Commission would roll back decades-old broadcast ownership rules that would've prevented a deal like this one from being approved. But President Trump threw a curveball in those plans over the weekend.
- In a twist that shocked the broadcast community Sunday, Trump said he "would not be happy" if the FCC lifted the national ownership cap that bars any station owner from collectively reaching more than 39% of U.S. households.
- His position stands in direct contrast with his ally FCC chair Brendan Carr's long-held belief that outdated regulations inhibit local broadcasters from merging and competing with Big Tech.
Reality check: The fact that Sinclair remains steadfast in its pursuit of Scripps despite Trump's comments, suggests it believes the ownership cap will be lifted eventually, or that it can devise a plan where it can make some station divestitures to keep regulators happy.
Zoom in: In a letter to Scripps' board Monday, Sinclair CEO and president Christopher Ripley said the updated merger proposal "reflects our conviction that a combination of Sinclair and Scripps would unlock substantial and enduring value for shareholders, strengthen local journalism, and position the combined company and employees for long-term success."
- He said his company is "prepared to enter into definitive documentation immediately upon engagement with Scripps" and requested a response to its proposal by Dec. 5.
By the numbers: Sinclair is offering to acquire all outstanding shares of Scripps that it does not already own for $7 apiece, consisting of $2.72 in cash and $4.28 in Sinclair common stock.
- It says that offer represents a 200% premium to Scripps' 30-day volume-weighted average stock price as of Nov. 6, the last trading day prior to significant buying activity by Sinclair.
The other side: Scripps said in a statement that its board "will carefully review and evaluate any proposals, including the unsolicited Sinclair proposal."
- It also said it doesn't plan to comment further on the bid until after the board completes its review.
What to watch: Sinclair is one of several local broadcasters eyeing deals amid what it thought would be a prime era for consolidation under Trump's FCC.
- Nexstar agreed to buy Tegna in a deal valued at over $6 billion.
- Apollo Global Management earlier this year was looking to sell its majority stake in Cox Media Group.
Editor's note: This story has been updated with comment from Scripps.
