Signs are displayed outside the headquarters of Sinclair Broadcast Group Inc. in Cockeysville, Maryland, USA.
Andrés Harrer | Bloomberg | fake images
Sinclair revealed a stake in the broadcasting station owner E.W. Scripps on Monday, in a move to push for a merger of the companies.
Sinclair, which took a roughly 8% position in Scripps according to the filing, recently launched a strategic review of its own business that could result in a merger. Scripps, for its part, has seen its struggles increase in the competitive industry and is among the smallest of its peers.
In the filing, Sinclair said it has been involved in “constructive” discussions about a deal and believes that, if a deal were reached, the transaction could be completed within nine to 12 months.
Sinclair said in the filing that, based on business multiples, $300 million in synergies were expected if a merger were to go through.
Scripps shares rose 40% on Monday, while Sinclair shares gained nearly 5%.
Sinclair, which acquired the stake for about $15.6 million, declined to comment beyond the SEC filing.
In a statement Monday, Scripps said its board “will take all appropriate measures to protect the company and the company's shareholders from the opportunistic actions of Sinclair or anyone else.”
“Scripps' board of directors and management are focused on generating value for all of the company's shareholders through the continued execution of its strategic plan,” the company said in its statement. “The board and management are aligned to do only what is best for all of the company's shareholders, as well as its employees and the numerous communities and audiences it serves throughout the United States.”
The statement added that the board continues to evaluate “any transactions and other alternatives that would enhance the value of the company and be in the best interests of all of the company's shareholders.”
The owners of free-to-air television station groups have suffered like other media companies in recent years due to the shift away from traditional pay television packages towards streaming. These broadcast stations, for the most part, make most of their money from so-called retransmission fees, which traditional television distributors pay per subscriber.
Broadcast station owners like Sinclair have been eager to pursue mergers as they push for deregulation under the Trump administration.
In August, Nextstar Media Groupthe largest owner of these stations, agreed to acquire tegna for 3,540 million dollars.
Meanwhile, Sinclair is also considering spinning off or splitting its business unit, which includes pay-TV network The Tennis Channel and marketing technology company Compulse, which was recently renamed Digital Remedy.
Sinclair and his advisers held talks with potential merger partners earlier this year, CNBC previously reported.
