Scripps rejects Sinclair’s unsolicited takeover bid

As seemed likely after Scripps took measures to dissuade Sinclair from acquiring more shares in its company, the Scripps board of directors unanimously rejected an unsolicited acquisition offer by Sinclair on Tuesday.

The company issued a press release to announce the decision.

“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,” Scripps’ board chair Kim Williams said in the release. “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.”

Last month, Sinclair made an unsolicited offer to Scripps valued at $7 per share in a mix of cash and stock. Sinclair already owns 9.9% of Scripps and had steadily grown its stake in recent weeks before Scripps altered its voting structure to discourage any more purchases.

Any takeover would require the FCC to lift its cap on broadcast station ownership that prevents any one company from reaching more than 39% of the country’s households. Sinclair currently owns 178 stations across 80 markets nationwide. Scripps owns over 60 stations in 40 markets.

The sports implications of a potential deal mostly center on women’s sports. Both the WNBA and NWSL have deals with Scripps-owned Ion to air weekly doubleheaders. Scripps also owns local NHL rights for four teams: the Las Vegas Golden Knights, Florida Panthers, Tampa Bay Lightning, and Utah Mammoth.

Sinclair is by and large out of the sports business aside from a few assets, one of which happens to be a jewel in Tennis Channel. The company has mulled a sale of Tennis Channel in recent years, but has so far held onto the must-have network for tennis fans.

It’s unclear whether Sinclair will come back with a stronger offer for Scripps in the future. They haver responded by releasing the following statement.

“We are disappointed that despite Scripps encouraging Sinclair to make a proposal, Scripps’ board rejected the 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. We call on Scripps to engage with us regarding our proposal. We believe Scripps’ shareholders deserve a full and fair evaluation of this opportunity.”