Shares in cable television programmers Discovery Communications and Scripps Networks Interactive jumped late Tuesday in after-market trading following reports that the two companies were once again trying to merge.
The Wall Street Journal first reported talks between Discovery, which owns the Discovery channel, Animal Planet and TLC; and Scripps Networks, which owns such lifestyle channels as HGTV, Cooking Channel, Travel Channel and the majority stake in the Food Network.
Scripps shares soared 14% to more than $76 a share in after-hours trading. Discovery's A shares also experienced a bounce of more than 9% to $28.50.
The talks reflect an increasingly challenged landscape for cable programmers, particularly medium-sized companies like Discovery and Scripps that are dependent on pay-TV programming fees for much of their income. That source of revenue is under pressure as more consumers opt for so-called skinny bundles or cut the pay-TV cord altogether.
Representatives of Discovery, based in Silver Spring, Md., and Scripps, based in Knoxville, Tenn., declined to comment.
The two companies would make a good fit because both specialize in nonfiction programming. The added girth would give Discovery more leverage in carriage fee negotiations with such massive distributors as AT&T, Comcast, Charter Communications and Dish Network.
Scripps has remained popular among pay-TV distributors that are offering smaller and lower-cost bundles of family-centric channels to budget-conscious subscribers. The company is valued at about $8.8 billion.
Discovery, whose largest individual voting shareholder is cable television mogul John C. Malone, has a market capitalization of $15 billion. Malone spurred last year's combination of Lionsgate and the premium movie channel Starz.
The two companies attempted to combine in late 2013, but those discussions collapsed, reportedly over the purchase price and because the family that controls Scripps was not ready to sell. Scripps has long been viewed as a jewel in the cable landscape because its programming is distinct from other channels.
Reuters separately reported that Viacom also discussed a combination with Scripps. A Viacom spokesman was not immediately available for comment.