E.W. Scripps Co. has agreed to purchase Summit America Television Inc. -- which includes the 30% of Shop at Home Network Scripps doesn’t already own, as well as five broadcast-television stations affiliated with the shopping network -- for about $184 million in cash.
Scripps had acquired 70% of Shop at Home from Summit America in October 2002 for about $49.5 million.
As part of this deal, Scripps said it would forgive a $47.5 million loan to Summit as part of the earlier transaction and would forego the redemption of $3 million in Summit preferred stock that Scripps holds. That pushed the value of the deal up to about $235 million.
Scripps said its total investment in Shop at Home is about $285 million.
The company added that it will pay about $4.05 per share for Summit, a 19.8% premium over its closing price of $3.38 Dec. 18.
The five broadcast stations are in lucrative markets -- KCNS/channel 38, San Francisco; WMFP/channel 62, Boston; WOAC/channel 67, Cleveland; WSAH/channel 43, Bridgeport, Conn.; and WRAY/channel 30, Raleigh/Durham, N.C. -- which added to the value of the deal, Scripps CEO Ken Lowe said in a conference call with analysts Friday.
"On a revenue-per-household basis, these are some of Shop at Home’s most productive households," Lowe said. "We’re bringing these subs in now because it is the smart thing to do."
He added that the five stations are dedicated solely to Shop at Home programming and reach about 5.3 million cable households. Shop at Home currently is available in about 45 million homes.
Scripps -- which also owns cable networks Home & Garden Television, Food Network, Do It Yourself and Fine Living -- said it expects to close the Summit deal in June.