Flextech ties up pay-TV deal

Pearson, the media conglomerate, and Cox Communications, the US cable company, have reached a preliminary agreement to sell their 15 per cent stakes in UK Gold and UK Living, two pay-television channels, to Flextech, the cable and satellite broadcaster controlled by US cable giant TCI. The stakes are worth pounds 30m each.

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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones