(Reuters) -U.S. broadcaster Sinclair on Monday disclosed an 8.2% stake in smaller rival E.W. Scripps and said it has been in talks for months about a deal that would combine the companies.

Shares of Cincinnati-based Scripps jumped 18.6% after the market opened, valuing the company at about $322.4 million.

Scripps, responding to the stake purchase, said its board remains focused on executing its strategic plan and delivering value to shareholders.

It added that it will evaluate any proposals that enhance value and "take all appropriate steps" to protect the company and its investors from opportunistic actions.

A deal for Scripps would mark the latest consolidation in a U.S. media industry struggling with sinking cable-TV viewership, a soft advertising market and rising competition from streaming platforms such as Netflix.

Those pressure have already spurred other players to pursue scale. Nexstar, the largest U.S. local-TV station operator and a key rival to Sinclair Broadcast Group, has offered to buy Tegna ( TGNA ), betting the Federal Communications Commission may ease local ownership limits as soon as 2026, a shift that could pave the way for larger deals after years of regulatory constraints.

Momentum has been building in national media as well. Paramount Global closed its $8.4 billion merger with Skydance Media in August, creating "Paramount Skydance Corp".

Larger station groups are racing to spread programming costs, strengthen their negotiating leverage with distributors and extend their national footprint.

Sinclair said a merger would create a more competitive broadcaster and could deliver significant long-term value for Scripps shareholders, citing more than $300 million in expected yearly cost savings based on public financials.

It added that Scripps investors would receive a stake in the combined company that Sinclair believes could be worth about three times Scripps' recent average share price.

The proposed transaction could be completed without external financing and would lower Scripps' debt, Sinclair said.