Scripps Networks Interactive, owner of the Travel Channel, HGTV, DIY Network, the Cooking Channel, Great American Country and most of the Food Network, may be ready to lure bids from companies like Disney–even with the stock at a record high–now that the controlling family trust has disbanded. Disney, Time Warner and Comcast are seen by analysts as potential acquirers, says a Bloomberg story.
The $9.5 billion corporation’s revenue outlook justifies a premium of 30% or more, according to Carne Capital LLC. Edward Jones & Co. said buyers will likely emerge given the end last week of the Edward W. Scripps Trust, which had 93.5% of the voting rights. Disney, owner of ESPN, should be drawn to Scripps Networks as a way to add more female-friendly content, said Citigroup Inc. and Macquarie Group Ltd., which also sees Time Warner as a potential acquirer.
Scripps Networks “probably belongs in a larger entity,” Amy Yong, a New York-based analyst at Macquarie, told Bloomberg. The dissolution of the family trust last week “puts Scripps into play,” she added. “Anyone who doesn’t have kind of female-centric or lifestyle-centric content would want to own this.”
Mark Kroeger, a spokesman for Scripps Networks, declined to comment on whether the company had been approached by any buyers or would be open to a sale.
Scripps Networks is offering potential buyers one of the fastest growth rates in the industry. Revenue will increase 23.9% between 2012 and 2015, according to the average of analysts’ estimates compiled by Bloomberg. That’s faster than 11 of 12 similar-sized U.S. media peers, trailing only Discovery Communications Inc.’s 24.1% rate, and compares with a median of 14.%, the data show.
Jerome Dodson, president of San Francisco-based Parnassus Investments, which oversees about $6.7 billion including Scripps Networks stock, told Bloomberg the company could attract bids of about $80 a share or more. Scripps Networks is worth more than its current price because of its projected growth.
Macquarie’s Yong agreed that Disney may be interested. She also identified Time Warner, whose holdings include cable channels HBO, CNN and TBS.
Another possible bidder is Philadelphia-based Comcast, which purchased a cable-TV system from E.W. Scripps Co. in 1996, said Carne Capital’s Bonner. Comcast acquired control of NBC Universal in 2011, adding networks from CNBC to USA Network to the company’s existing cable delivery system.
