Investors reacted positively Friday to news that Crown Media Holdings Inc., operator of the top-rated Hallmark Channel, may be for sale, sending its shares up 20.2 percent in heavy trading.
The news, which was announced late Thursday afternoon, sent 613,591 shares of the company changing hands Friday, more than 10 times the normal volume. The stock closed the day at $10.64 after opening at $8.85.
Studio City-based Crown Media said late Thursday it had formed a committee of board members to explore strategic alternatives for its business, including selling the channel or the entire company to a third party.
“After considering various factors, including the strong performance of the Hallmark Channel and the prevailing current economic realities of being a one-channel business in our industry, the board unanimously determined that now is the time to look at all alternatives,” said David Evans, president and CEO of Crown Media.
The company appointed a special committee to oversee the process. Hallmark Cards Inc. said in the company statement that it supports the effort. Privately held Hallmark Cards owns the majority of shares of Crown Media through a subsidiary.
In its most recent second quarter, ended June 30, the company posted a net loss of $56.3 million, compared with a loss of $31.4 million a year earlier due to a sharp rise in operating costs in a number of areas, including higher programming fees and increased administrative and services costs.
The Hallmark Channel is ranked among the top 10 cable networks and has nearly 70 million viewers.
Crown Media’s 52-week share price range was $6.56 to 10.11 just prior to Thursday’s announcement.