Item 2.01 Completion of Acquisition or Disposition of Assets.

 

Scripps Networks Interactive Merger

On March 6, 2018, pursuant to the Agreement and Plan of Merger by and among Discovery Communications, Inc. (“ Discovery ”), Scripps Networks Interactive, Inc., an Ohio corporation (“ Scripps ”), and Skylight Merger Sub, Inc., an Ohio corporation and a wholly owned subsidiary of Discovery (“ Merger Sub ”), dated July 30, 2017 (the “ Merger Agreement ”), Merger Sub was merged with and into Scripps with Scripps continuing as the surviving company (the “ Merger ”). Discovery is continuing as the parent company, and trades on the Nasdaq Global Market with the trading symbols DISCA, DISCB and DISCK.

On March 6, 2018, pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each Common Voting Share, par value $0.01 per share, of Scripps (the “ Common Voting Shares ”) and each Class A Common Share, par value $0.01 per share, of Scripps (the “ Class A Shares ”, and collectively with the Common Voting Shares, the “ Scripps Shares ”) issued and outstanding immediately prior to the Merger (other than Shares held by Discovery and Merger Sub) was converted into the right to receive $65.82 in cash (as a result of Discovery’s exercise of the cash top-up right), without interest, and 1.0584 shares of Discovery Series C common stock (“ Series C Shares ”) for each Scripps Share (the “ Mixed Consideration ”). The stock portion of the Mixed Consideration was calculated based on the Series C Shares’ volume weighted average price on the NASDAQ Global Select Market (“ NASDAQ ”) measured on a cumulative basis over the 15 trading days ending on (and including) the third trading day prior to the effective time of the Merger, subject to a two-way collar detailed in the Merger Agreement.

As previously disclosed, under the terms of the Merger Agreement, subject to the proration, allocation and other limitations set forth in the Merger Agreement and the election materials separately provided to the applicable holders of Scripps Shares, holders of Scripps Shares had the option to elect to receive, for each Scripps Share issued and outstanding immediately prior to the Merger (other than Shares held by Discovery and Merger Sub), (i) an amount in cash, without interest, based on the dollar value of the Mixed Consideration for each Share (the “ Cash Consideration ”), or (ii) a number of Series C Shares for each Share based on the dollar value of the Mixed Consideration (the “ Stock Consideration ” and, together with the Mixed Consideration and the Cash Consideration, the “ Merger Consideration ”).

Based on the preliminary report provided on the closing date of the Merger by the election and exchange agent retained by Discovery in connection with the Merger, the election results with respect to the Merger Consideration were as follows:

Because the stock election was oversubscribed, based on the preliminary report, holders of Scripps Shares who made a stock election will be subject to the proration procedures described in the Merger Agreement. No fractional Series C Shares are being issued and cash is being paid in lieu thereof.

In accordance with the terms of the applicable award agreement, at the effective time of the Merger, the Scripps equity awards were treated as follows:

employees and non-employee directors was cancelled in exchange for the right to receive a lump sum cash payment.

The foregoing description of the Merger Agreement is qualified in its entirety by reference to the Merger

Agreement, a copy of which was filed as Exhibit 2.1 to Discovery’s Current Report on Form 8-K filed on July 31, 2017 and is incorporated herein by reference.