Viacom Out of the Running for Scripps Networks
July 26 2017 - 8:03PM
Dow Jones News
By Amol Sharma and Sarah Rabil
Viacom Inc. is out of the bidding to acquire Scripps Networks
Interactive Inc., leaving Discovery Communications Inc. as the
remaining potential buyer in the running, people familiar with the
situation said.
Viacom, owner of cable TV networks including MTV and Comedy
Central, saw promise in combining its youth-skewing networks with
Scripps channels like HGTV and Food Network that specialize in
nonfiction and lifestyle programming.
But the media company faced financial constraints and didn't
want to overpay for the asset, one of the people familiar with the
situation said. Scripps has a market value of almost $11
billion.
After reviewing bids from both companies, Scripps determined it
would prefer to negotiate exclusively with Discovery, the people
familiar with the situation said.
A deal would have been a significant pivot by Viacom's
relatively new chief executive, Bob Bakish, who in his first months
on the job has been focused on stabilizing the company's balance
sheet, turning around film operations and emphasizing a set of core
cable networks.
Doubling down on the cable TV business would be been viewed as a
surprising move by many on Wall Street.
Viacom had more than $12 billion in debt as of March 31 and is
clinging to the lowest-level of investment-grade credit rating,
according to Moody's Investors Service, meaning that a deal
involving a substantial amount of cash would have risked a
downgrade to junk.
Write to Amol Sharma at amol.sharma@wsj.com and Sarah Rabil at
Sarah.Rabil@wsj.com
(END) Dow Jones Newswires
July 26, 2017 19:48 ET (23:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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