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Broadcast giant Sinclair is back to the drawing board in its $4 billion hostile takeover of smaller rival E.W. Scripps.
Scripps on Tuesday rejected Sinclair’s offer to combine the two companies, which would put stations reaching more than 350 different markets in the hands of conservative-leaning Sinclair, which was among the distributors that briefly took Jimmy Kimmel’s show off the air earlier this year.
Sinclair executives had hoped their $7-a-share bid would force Scripps — an ABC stalwart with a more straight-down-the-middle editorial approach — to negotiate, and have offered to set up guardrails around editorial independence to insulate Scripps’ stations from meddling by Sinclair’s conservative brass, according to a securities filing.
“There is obviously an ideological difference between the two, and that is probably the biggest gating factor,” Dan Kurnos, an analyst at The Benchmark Company, told Semafor.
But the moment is right for big mergers, he added. “As long as Donald Trump is in the White House, as long as Brendan Carr is chairman of the FCC, you will have the option to try and drive new business, and to try to consolidate.”
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Sinclair is frustrated by Scripps’ radio silence and could choose to wage a fight for board seats in the new year, people familiar with the matter said. A spokesperson declined to comment.
That would be an uphill fight: The Scripps board is controlled by directors appointed solely by the family behind the 147-year-old company. Only three of 11 board seats can be chosen by public stockholders.
“Scripps’ management and board engaged extensively with Sinclair before Sinclair ultimately ended discussions,” before determining that the offer wasn’t in shareholders’ best interests, a Scripps spokesperson said.
Like other storied media families, the Scripps family is sprawling, now six generations removed from the company’s founder. Some members are motivated by concerns over editorial independence, while others are eager for a financial windfall, according to people familiar with the situation.
Few other suitors are seen as likely to emerge. Neither Comcast nor Disney are seen as viable bidders, industry experts say, given they’ve gone crosswise with the Trump administration, which would need to bless the transfer of station licenses. One theoretical acquirer, Cox Media Group, isn’t interested right now, according to a person close to Cox.