Rejected: WBD, Scripps refuse takeover offers
Back to the drawing board as merger media continues
Tuesday saw more rejections happen than what Snoopy gets from his publisher.
Scripps’ board unanimously rejected rival Sinclair’s $622 million takeover bid, stating it wasn’t in the best interest of their shareholders. Sinclair started buying up Scripps stock, up to 9.9 percent. That prompted Scripps to adopt a “poison pill” strategy, preventing Sinclair or any other company from taking over the company through stock purchases. Sinclair offered to buy Scripps for $7 a share, or $622 million.
Sinclair called the move “disappointing”.
“We are disappointed that despite Scripps encouraging Sinclair to make a proposal, Scripps’ board rejected the proposal without engaging,” Sinclair said. “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.”
If Sinclair were successful, they would’ve owned stations in 60 more markets, including stations in cities such as Detroit, Cleveland, Cincinnati, and Milwaukee – all located in or potential swing states in the next Presidential election. Scripps also owns Ion, and multicast networks Bounce, Laff, Grit, and Court TV.
Scripps stated it remains open to any proposal that could boost shareholder value.
Meanwhile, Warner Bros. Discovery’s board recommended it would reject Paramount Skydance’s $108 billion (or $30 a share) hostile takeover bid, stating Netflix’s offer is better.
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” said WBD board chairman Samuel Di Piazza. “We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
The WBD board accuses Paramount Skydance owner David Ellison of not using his own money but $24 billion worth of wealth funds from Middle Eastern countries to fuel his bid, which could cause national security concerns. Earlier this week, Affinity Partners, a private equity firm in which President Trump’s son-in-law Jared Kushner is a part of, pulled out of Paramount’s financing group.
Trump’s relationship with Ellison and his father, Oracle co-founder Larry Ellison, has started to unravel lately as the President criticized Paramount Skydance again over CBS News coverage of his administration, despite hiring conservative news editor Bari Weiss to head the unit. “For those people that think I am close with the new owners of CBS, please understand that has treated me far worse since the so-called “takeover,” than they have ever treated me before,” Trump said on his Truth Social app. “If they are friends, I’d hate to see my enemies!” Some analysts are wondering if this would have any impact on Paramount’s bid, as any transaction to buy WBD must receive approval from the Trump Administration.
Similar to what happened with Ted Turner and Barry Diller, this week proved how challenging it is to launch a hostile takeover of a media company. However, neither Sinclair nor Paramount should be counted out, as the latter may raise its bid for WBD but plans to try again with the same offer to shareholders, but if they said “no” the first time, it may be difficult to get a “yes” a second time.