Flextech ties up pay-TV deal
In exchange for its shares, Pearson will get voting stock in Flextech representing equity of about 4.6 per cent of the company, although this could change depending on Flextech's share price when the deal is finalised.
It is still unclear how many votes will be attached to the voting stake. TCI is known to be seeking to avoid diluting its current holding, which gives it 51 per cent of the votes. Cox Communications is believed to have secured a similar deal.
The preliminary agreement opens the way for Flextech to complete its recently announced joint venture with the BBC to launch as many as eight pay-television channels on satellite and cable from next summer. A final agreement could be reached as early as November. It also gives Pearson a stake in a company many analysts expect will emerge as a "second force" in the supply of programming in the pounds 1bn market for pay-television.
Negotiations between Flextech and Pearson on the new pay-television channels were complicated by the need to conclude a complicated set of talks involving the BBC, Pearson and Cox Communications, which were aimed at consolidating Flextech's holdings in the two channels.
Once the UK Gold and Living consolidation is formally in place, BBC/Flextech can broadcast programmes from the extensive library of the BBC, the rights to which are currently held by UK Gold, the "golden oldie" nostalgia channel.
According to sources close to the talks, Pearson has won new service contracts from Flextech in exchange for its agreement to sell the UK Gold/Living stakes. Pearson Television handles the transmission services for UK Living, as part of its pounds 90m a year transmission business.
Under the provisionally agreed deal with Flextech, Pearson will now provide similar services for UK Gold, Bravo and Discovery, which is worth about pounds 2m annually.
As part of the deal, Pearson, which owns Thames Television and Grundy Worldwide, has also agreed to move some of its production activities to Flextech's studio in Maidstone.
Flextech and the BBC hope to complete their programming deal by the end of the year. The two briefed cable industry executives and media analysts Monday night on their plans for the new channels, in a presentation one analyst said was "slick and impressive." Flextech shares rose 21p to 611p.
The eight channels will include arts, sport, documentaries, current affairs and even a repeats channel.
Revealed: Devastating impact of 'bedroom tax' sees huge leap in demand for emergency hardship handouts for tenants
Notes from a small island: Is Sealand an independent 'micronation' or an illegal fortress?
You thought Ryanair's attendants had it bad? Wait 'til you hear about their pilots
Revealed: Eerie new images show forgotten French apartment that was abandoned at the outbreak of World War II and left untouched for 70 years
Chloe Johnson death: Family of five-year-old British girl who died in a pool at in Egypt's Sharm el-Sheikh resort 'angry' that more wasn't done to save her
- 1 Stoke City investigate 'religious abuse' after 'pig's head is found in Kenwyne Jones' locker'
- 2 Gove’s lesson: spare the comma, spoil the child
- 3 Ukip captures Labour fortress in South Yorkshire by-election
- 4 You thought Ryanair's attendants had it bad? Wait 'til you hear about their pilots
- 5 Join Ryanair! See the world! But we'll only pay you for nine months a year
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£550 - £600 per day: Orgtel: Fidessa Analyst / PM - Banking - London - Up to £...
£450 - £500 per day: Orgtel: Sourcing Manager - Banking - London - Up to £500p...
To be discussed at interview.: Queen Elizabeth's School: An experienced and ef...
£294.05 - £330.92 per day + 150 per day travel and accommodation: Orgtel: A le...