Pearson closes in on US television company

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The Independent Online
Media and information giant Pearson confirmed yesterday it is in advanced negotiations to buy US television production company ACI, maker of mini- series and made-for-TV movies.

A Pearson spokesman refused to reveal the likely price tag, but analysts expect it might easily exceed the pounds 175m Pearson paid earlier this year for Grundy Worldwide, maker of game shows and soap operas such as Neighbours.

It also emerged yesterday that German media conglomerate Bertelsman has approached ACI about a possible deal. But the Pearson spokesman said the UK company believed it was the only serious bidder.

ACI and Pearson were continuing to haggle over terms, with both price and the terms of management contracts under negotiation. Pearson is keen to reach iron-clad agreements with ACI's senior producers, some of whom have long-term supply deals with the major US networks and who have direct control of extensive libraries of programmes that have yet to be seen on British television.

Previous acquisitions of US TV companies by British firms have foundered with the subsequent departure of senior management talent. Pearson's subsidiary, Thames Television, itself was forced to write down its investment in US production house Reeves following the illness of a top executive.

Water-tight contracts are seen as particularly necessary given ACI's structure. It operates as a co-operative of several formerly independent producers, including chief executive Jaime Bennett, Michael Jaffe and Robert Greenwald, some of Hollywood's leading suppliers of made-for-TV films.

The acquisition fits Pearson's strategy of expanding its television production arm. Through Thames and Grundy, the company has become one of the UK's largest programme makers. Chief executive of Pearson Television, Greg Dyke, formerly head of LWT, has said he wants to concentrate on building both the library and programme-making sides of the business, particularly if a Pearson-led consortium wins the bidding war for the new Channel 5.

As a consequence, the company is also looking at other US production houses, although the Pearson spokesman confirmed the ACI talks are by far the most advanced.

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