Sinclair acquires Scripps’ stake in a merger attempt

Sinclair Revealed stake in fellow broadcast station owner E. W. Scripps On Monday, in a move to push towards the merger of the two companies.

Sinclair, which has acquired a roughly 8% stake in Scripps, according to the filing, recently launched a strategic review of its own business that could lead to a tie-up. For its part, Scripps has seen its difficulties mount in the competitive industry and is among the smallest of its peers.

Sinclair said in its filing that it had engaged in “constructive” discussions on the deal and believed that if an agreement was reached the deal could be completed within nine to 12 months.

Based on trading multiples, there would be expected synergies of $300 million if the merger goes through, Sinclair said in the filing.

Scripps stock rose more than 40% on Monday, while Sinclair stock rose 7%.

Sinclair, which acquired the stake for $15.6 million, declined to comment after its filing with the Securities and Exchange Commission on Monday.

Scripps said in a statement Monday that its board “will take all appropriate steps to protect the company and its shareholders from the opportunistic actions of Sinclair or anyone else.”

“The Scripps Board of Directors and management are focused on increasing value for all of the company’s shareholders through the continued implementation of its strategic plan,” the company said in its statement. “The Board of Directors and management agree to do only what is in the best interests of all of the Company’s shareholders as well as its employees and the many communities and audiences it serves throughout the United States.”

The statement added that the Board of Directors continues to evaluate “any transactions and other alternatives that would enhance the company’s value and would be in the interest of all the company’s shareholders.”

Broadcast TV group owners, like other media companies, have struggled in recent years due to the shift away from the traditional pay-TV package and towards streaming. These broadcast stations, for the most part, make most of their money from so-called retransmission fees, which traditional TV distributors pay on a per-subscriber basis.

Broadcast owners like Sinclair have been eager to merge as they seek deregulation under the Trump administration.

In August, Nexstar Media Groupthe majority owner of these stations, agreed to the acquisition Tegna For $3.54 billion.

Meanwhile, Sinclair is also considering spinning off or splitting its enterprise unit, which includes pay-TV network The Tennis Channel and marketing technology company Compulse, which was recently rebranded as Digital Remedy.

Sinclair and its advisors held discussions with potential merger partners earlier this year, CNBC previously reported.