In a unanimous decision, the board of E.W. Scripps rejected rival Sinclair’s unsolicited acquisition offer, the company announced Tuesday, according to Variety. The deal would have added yet another feather in the cap of Sinclair, which is already the number two U.S. station operator.
On November 24, Sinclair offered Scripps $7 per share in cash and stock for the portion of the company that it does not control, after Sinclair had previously acquired 9.9 percent of its smaller rival, Variety reports. Sinclair’s maneuver came amid merger activity at rival Nexstar, which is the top station operator in the country, as the company attempts to acquire Tegna for $6.2 billion, which would solidify the company’s dominance in the market.
In a statement Tuesday via Variety Scripps said “The Scripps board determined, following a careful review and evaluation in consultation with its financial and legal advisors, that Sinclair’s offer is not in the best interests of the company and its shareholders.”
Chair of Scripps’ board Kim Williams added via Variety that while Sinclair’s bid wasn’t right for the company, “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.”
According to Variety, Sinclair responded on Wednesday by saying “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.”
Sinclair operates 185 TV stations, doing business in 85 markets across the U.S., per Variety. Scripps, meanwhile, operates 60-plus stations in over 40 markets. Sinclair says that if Scripps accepted their proposal, Scripps shareholders would control roughly 12.7 percent of the merged company.
Industry observers had previously noted that simple combination of the two companies would run afoul of an FCC policy that states that no single entity can control access to 39 percent of American viewers. According to Variety, Sinclair stated in an SEC filing that they “are confident that under existing rules, including the national cap, the transaction can be completed in a timely manner with limited select divestitures.”
The Sinclair offer, if accepted, would have resulted in a combined entity valued at $2.9 billion, per Variety. Sinclair estimated cost synergies under the deal to be $325 million.