Scripps lands deal for the Travel Channel
NEW YORK (Reuters) - Scripps Networks Interactive Inc. plans to buy a controlling stake in the Travel Channel under a deal with Cox Communications Inc that values the cable network at nearly $1 billion.
Under the deal announced on Thursday, Scripps, which already owns the Food Network and HGTV, gets 65 percent of the Travel Channel and Cox Communications will hold on to the other 35 percent. The deal is expected to be completed by January.
In creating a joint venture, Cox will contributing the Travel Channel, which the two sides valued at $975 million, and Scripps will put in $181 million in cash. The partnership, which will be controlled by Scripps, will take on $878 million in third-party debt.
Sources previously said that News Corp and private equity firms Kohlberg Kravis Roberts & Co, Thomas H. Lee Partners and Providence Equity were interested in the Travel Channel, known for programs such as "Anthony Bourdain: No Reservations" and "Bizarre Foods with Andrew Zimmern."
Initially, media analysts and bankers expected Travel Channel to be valued in the range of $600 million to $700 million. The ultimate valuation on underscores the appetite in the industry for cable networks, which draw revenue from distribution fees as well as advertising.
Time Warner Inc, NBC Universal, owned by General Electric Co and Vivendi SA, and Liberty Media Corp had also initially expressed interest in looking at the sales prospectus, sources had previously said, but it was unclear how many of them had bid.
For Cox, a joint venture should help it avoid the big tax bill it inherited as part of a 2007 deal to swap its 25 percent stake in Discovery Communications Inc. It received the Travel Channel and $1.275 billion of cash for that stake.
(Reporting by Paul Thomasch; Editing by Derek Caney)
