It seems so, Business Insider’s Nicholas Carlson reports. “For sure, Mayer and Yahoo considered acquiring Scripps Networks Interactive” last year after Yahoo saw a windfall of cash from its stock in Alibaba, which went public in September, says the reporter whose book about Yahoo CEO Marissa Mayer comes out next week. But due to the high price — Scripps has a $10.5 billion market value and probably would insist on a premium — it “seems pretty unlikely that Yahoo and Scripps will merge anytime soon.” Scripps shares are up less than 1% in early trading today, which suggests that investors agree that a deal is not in the cards.
Still, the companies’ talks became serious. Yahoo initially was interested in Food Network, and Carlson says the conversations expanded to all of Scripps whose fleet of lifestyle channels includes HGTV, Cooking Channel, Travel Channel, and Great American Country. The info comes from “two former Yahoo employees” including one “with firsthand knowledge of Yahoo’s interest in Scripps.”
Mayer wasn’t just interested in Scripps: Carlson cites a “a media industry source close to Yahoo executives” who says that last summer — when Time Warner was fending off Rupert Murdoch’s unsolicited $76 billion offer — “there were ‘pretty active’ rumors” that Yahoo might buy CNN.
Mayer’s interest in cable is perplexing: Investors are losing patience with the CEO’s efforts to reinvigorate the company — and probably would howl at a huge deal to buy a traditional media company. (Yahoo’s stock is down 1.6% this morning.) Its 15% stake in Alibaba “is currently worth more than the entire enterprise value of Yahoo,” Starboard Value’s Jeffrey Smith told Mayer in September in a letter calling for a merger with AOL. “When adding [a 35.5% stake in] Yahoo Japan, these two minority equity interests are worth approximately $11 billion, or $11 per share more than the current enterprise value of the Company.”
But Mayer is enthusiastic about online video. She called it “one of the largest growth opportunities” in November when Yahoo agreed to pay $640 million for online ad seller BrightRoll. The combination “builds positive momentum for Yahoo’s broader display advertising business in 2015,” she said.