Scripps Adopts Poison Pill to Repel Sinclair Takeover
E.W. Scripps’ board of directors has adopted a “poison pill” shareholder rights plan intended to prevent Sinclair from buying the company (see 2511240049), according to a news release Wednesday. “The rights plan is intended to protect shareholders from coercive tactics and to provide the board with time to thoroughly evaluate the offer and any other potential strategic alternatives,” it said. In an emailed statement, Sinclair said, “Given the family control of Scripps, the only effect of adopting a poison pill is to limit liquidity opportunities for public shareholders of Scripps.”
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The Scripps shareholder rights plan would -- for one year -- give existing shareholders of Scripps the power to buy additional shares of Scripps at a 50% discount if an entity acquires 10% or more of the company’s shares, excluding the acquiring entity. If Scripps is bought by an unapproved party that has purchased 10% or more shares, the other shareholders would also get the same discount on shares of that company. Entities with more than 10% of Scripps stock prior to the adoption of the rights plan are grandfathered in. Sinclair announced an 8.2% stake in Scripps earlier this month. A media broker told us the shareholder rights plan means that it would be extremely expensive for Sinclair to move forward with buying Scripps.
“We believe the strategic and financial rationale of a potential Sinclair-Scripps combination is indisputable,” said Sinclair in its response statement. “As requested by Scripps, we offered a proposal that builds upon previous constructive conversations, and we look forward to continuing to engage with Scripps so we can reach a definitive agreement and deliver significant benefits to shareholders and local communities.”