Is Discovery the Next Target in Big Media's Content Takeover?

NEW YORK (TheStreet) - Shares of Discovery Communications  (DISCK) jumped on Wednesday on the view that television programming, especially content that travels well internationally, may be even more valuable considering the price Rupert Murdoch's 21st Century Fox (FOXA) is reportedly willing to pay for Time Warner (TWX) and its pay-TV channels HBO, TNT and TBS.

Discovery gained 6.3% to close Wednesday $83.50 as Time Warner rejected a takeover proposal from Fox valued at about $80 billion.

Fox's interest in Time Warner underscores the rush by content providers to own more programming that can be sold to pay-TV operators and other programming services available on digital devices. The proposed combination of two of the largest U.S.-based entertainment companies comes as pay-TV operators Comcast  (CMCSA)and AT&T  (T) are seeking to get larger by acquiring Time Warner Cable (TWC) and DirecTV (DTV), respectively.

Bernstein Research media analyst Todd Juenger suggests that 2014 might be "the year of the deal", in a flash note released today. Considering the number of potential media-mergers and proposals on the table, Juenger may have been right.

Juenger writes that "the urgency to find a 'dance partner' will increase across the sector. Nobody wants to be the company that gets left out of the consolidation wave, and companies would rather control their own destinies". With that said, we have several reasons to believe media vultures may have set their eyes on Discovery Communications.

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