Scripps Networks Interactive Inc. announced today it would invest $1 billion in a stock buyback plan, with a big chunk of the money going to the family trust that controls the
Knoxville-based lifestyle media company.
Scripps Networks said it would buy 6,430,027 shares of its Class A Common Shares from The Edward W. Scripps Trust for $300 million, or $46.66 per share.
Another $700 million will be spent on buying back Class A Common Shares on the open market or through private transactions, the company said.
The company did not disclose a timetable for the stock repurchase, but said the buy back will be timed to market conditions.
“The decision to repurchase shares from the Scripps Trust and initiate a meaningful share repurchase program demonstrates our faith in the financial strength of our lifestyle media businesses and the company’s ability to generate strong free cash flow,” Ken Lowe, chairman, president and CEO of Scripps Networks, said in a prepared statement. “It also reflects our commitment to create value for shareholders; provides us with ample resources to meet operating requirements; and gives us the financial flexibility we need to invest in the company’s long-term growth.”
The Trust “has no further plans to reduce its holdings” of Class A Common shares, the company said. The Trust will remain the company’s “single largest shareholder with approximately 26 percent of the company’s Class A Common Shares following today’s transaction. The Trust also holds approximately 93 percent of the company’s controlling class of shares (Common Voting Shares), for which there is no public market,” the company said.
Earlier this month Bloomberg reported that the Trust had filed a petition in an Ohio probate court that could clear the way for acquisition of the company.
Scripps Networks owns cable television networks HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and country music network Great American Country and related Internet brands.
Photo: Scripps Networks Interactive headquarters in West Knoxville. (Knoxville News Sentinel archives)