VOL. 127 | NO. 206 | Monday, October 22, 2012
Scripps Grandson Dies; Investors Eye Family Sale
LOS ANGELES (AP) – Shares of HGTV and Food Network owner Scripps Networks Interactive Inc. rose nearly 6 percent before giving back most of the gains on Friday after the death of a grandson of founder Edward W. Scripps prompted speculation that the family might sell its controlling stake.
Pay TV programming company Scripps Networks and newspaper publisher The E.W. Scripps Co. both announced Friday that Robert P. Scripps had died at age 94. He was the last surviving descendant for whom The Edward W. Scripps Trust was created.
The trust owns about 90 percent of the voting shares in both companies, which were split apart in 2008. The trust will now be dissolved and the shares will be distributed to beneficiaries.
The releases said "the family's next generation will control" both companies. Although the trust will be dissolved, the companies said, the beneficiaries are bound by an agreement that requires them to offer their voting shares to other beneficiaries and the companies before making them available to third parties.
The agreement, spelled out in the companies' proxy statements, will be in effect for 10 years after the trust is dissolved and could be renewed for additional 10-year periods. It also compels the family to make joint decisions on matters before the companies' shareholders.
Still, investors speculated that the family might sell its stake. Large media corporations would likely be interested in pay TV networks, which are generally seen as strong, steady cash generators that benefit from rising subscription fees and rebounding ad revenues.
Citi analyst Jason Bazinet said in a research note Friday "we expect Scripps will likely be sold to a third party." He said The Walt Disney Co., owner of ESPN, Disney Channel and other pay TV networks, is "the most likely suitor."
The E.W. Scripps Co., the owner of 19 TV stations and newspapers in 13 markets including The Commercial Appeal in Memphis, Tenn., is seen as a less attractive takeover target.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.