Viacom Inc. (VIAB) - Get Report won't attempt to acquire Scripps Networks Interactive Inc. (SNI) , leaving a possible acquisition of the cable TV company to Discovery Communications Inc. (DISCA) - Get Report , according to a source close to the matter. Discovery continues to engage in talks with Scripps although a deal isn't certain. 

Viacom, Discovery and Scripps declined to comment.

A merger with Discovery would create a company with a large portfolio of nonfiction networks that could be used as a base for a nonsports skinny bundle. Consumers are increasingly clamoring for more choices in cable packages, and all three companies are considering launching a bundle featuring their nonfiction channels.

A deal between Discovery and Scripps would combine Discovery's Animal Planet, Discovery Channel and Investigation Discovery with Scripps' HGTV, Food Network and DIY Network.

Discovery's pursuit of Scripps is based on the notion that a combined company would have more leverage when negotiating affiliate fees with the country's largest pay-TV operators, AT&T Inc. (T) - Get Report , Comcast Corp. (CMCSA) - Get Report and Charter Communications Inc. (CHTR) - Get Report .

There's no guarantee that Discovery would be able to drive higher fees from owning Scripps' networks than what it has been able to secure at present. Discovery, though, would have access to Scripps' higher cash flow as it invests in its own programming.

It's a big bet, especially if Discovery is required to pay more than $90 per share for Scripps. The company, controlled by members of the Scripps family, is said to be demanding a deal that would include at least 50% cash, CNBC reported on Tuesday.

As for a takeout price, buying Scripps might require going as high as $95 per share, Wells Fargo Securities LLC media analyst Marci Ryvicker has said, meaning a $12.3 billion price tag for the target's Class A and common voting shares plus $3.05 billion in assumed debt. Scripps shares have jumped 24% since the merger news was first made public on July 18.

Shares of Scripps were up 2.6% to $86.25 in premarket trading Thursday, July 27, while Discovery shares were down 2.8% to $25.85. 

Viacom's stock was up 1.8% to $35 as investors likely breathed a sigh of relief that the company wouldn't take on more debt. Viacom finished the first quarter with $12.19 billion in debt.

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