Please ensure Javascript is enabled for purposes of website accessibility

Why Scripps Networks Interactive, Inc. Stock Popped Today

By Jeremy Bowman – Jul 19, 2017 at 12:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The owner of HGTV and Travel Channel jumped on merger rumors.

What happened

Shares of Scripps Networks Interactive, Inc. (SNI) were surging today on news that the media company was seeking to merge with Discovery Communications Inc. (DISC.A)

As of 11:46 a.m. EDT, Scripps shares were up 13.8% while Discovery had gained 4.4%.

Food Network chef Bobby Flay on a set wearing an apron

Food Network chef Bobby Flay. Image Source: Scripps.

So what 

The talks between the two cable companies come three years after a plan to combine fell apart, according to Reuters, which first reported the news. 

Scripps owns HGTV, Travel Channel, and a majority of the Food Network, which would fit well with Discovery's family of channels, which include Animal Planet and TLC. Terms of a potential deal are unknown, but the spike in Scripps shares seems to indicate investor thirst for such a deal. As competition from Netflix and other internet TV options has risen, cable viewership has fallen, making consolidation more desirable. Small companies like Scripps would be better as part of a larger media organization.

Now what

Discovery is the larger of the two companies with a market cap of $16 billion compared to Scripps at around $10 billion after today's jump. Considering that a potential deal fell apart once before, there's no guarantee that the two sides will reach an agreement, but it's clear that Scripps is seeking a merger and acquisition deal as the company also held talks with Viacom (NASDAQ: VIA).

That's a sign that Scripps could be headed for a bidding war if both parties are interested. Expect volatility from the stock as more news comes out on a potential deal.

Jeremy Bowman owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool recommends Scripps Networks Interactive. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Scripps Networks Interactive, Inc. Stock Quote
Scripps Networks Interactive, Inc.
Warner Bros. Discovery, Inc. Stock Quote
Warner Bros. Discovery, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.