The decision followed a four hour meeting by the Scripps family.
It’s said to have concluded that Discovery’s ability to finance a deal is more secure. In addition, the programming company behind HGTV, Food Network, and the Travel Channel was seen as better aligned culturally with Discovery than with Viacom.A deal could come as early as next week. Discovery is believed to be preparing a combination cash and stock offer. Wells Fargo Securities’ Marci Ryvicker says Scripps might go for as much as $95 a share, about $10 more than its closing price today. The company also likely would get at least one seat on Discovery’s board.
Viacom was weighing the possibility of making an all-cash offer, Reuters reported.
But many analysts considered that too risky. Viacom likely would have had to take on more debt, jeopardizing its investment grade rating — someting that CEO Bob Bakish has vowed to protect.
Bakish also has been looking to narrow Viacom’s focus to six core brands: Nickelodeon, Nick Jr., BET, Comedy Central, MTV, and Paramount — with Spike rebranded as a general entertainment service: The Paramount Network