Local TV station owner E.W. Scripps said Tuesday that its board of directors has rejected an unsolicited takeover bid by larger rival Sinclair Inc.
Scripps, whose assets also include the Ion broadcast network, said the board’s decision was unanimous. It followed Sinclair’s disclosure last month that it had taken an 8.2% stake in the company and offered to acquire the rest of its stock in a $7-a-share deal comprised of cash and stock.
“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,” board chair Kim Williams 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.”
The merger drama has unfolded as an even bigger deal winds its way through the regulatory process, with Nexstar Media Group looking to acquire Tegna in a $6.2 billion transaction. The local TV megadeals will require regulators and/or lawmakers to relax or eliminate the current federal cap on station ownership. Under current rules, a single owner may not control stations reaching more than 39% of U.S. households. Nexstar-Tegna would double that reach, and Sinclair-Scripps also would have been above the longtime 39% limit.
The board’s official rejection came after a strong signal that Scripps was not particularly receptive to the overture. Shortly after Sinclair’s announcement of its proposal, Scripps said its board would “take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”
With viewership and advertising on the wane due to ongoing cord-cutting, local TV is under enormous pressure. Nexstar and other large companies have been arguing that they are, in effect, the only chance for survival given the challenges of competing with Big Tech streaming platforms. They have publicly cited President Trump’s support for doing away with the ownership cap, but the president has also thrown a curveball by agreeing with conservatives who worry that the abandonment of the cap could help left-wing programmers.