SelecTV deal imminent
Thursday 04 January 1996
Advisers to Pearson and SelecTV were yesterday locked in last-minute talks aimed at announcing their long-awaited deal by as early as tomorrow. Provided the final price can be agreed, Pearson is expected to bid about pounds 45m for SelectTV, maker of Birds of a Feather and Lovejoy, by way of a public offer for the company's shares.
The offer, which is likely to be unveiled before market opening tomorrow, will be accompanied by an announcement that SelecTV's cable channel is to be sold separately, for as much as pounds 5m. The probable buyer is Carlton, Michael Green's TV media company, which has been looking to launch a UK cable operation fed by its Carlton and Central programming libraries.
Talks with Granada about launching a joint cable-exclusive channel featuring both Carlton and Granada programming failed last year, according to informed sources. Granada has since made a deal with BSkyB, the satellite broadcaster, to launch as many as eight new channels. Included is a "Granada Gold" channel based in part on re-runs of Coronation Street.
A Carlton spokesman refused to confirm whether the company was involved in the negotiations over SelecTV. "It is not our policy to comment on market speculation," he said.
Pearson, which is interested only in SelecTV's independent production operations and its programming library, is also expected to sell SelecTV's 15 per cent stake in Meridian to MAI, which already owns 61 per cent of the ITV licence-holder. The price is believed to be as much as pounds 30m. An MAI spokesman declined to comment.
Talks between Pearson and SelecTV have been under way since November, and efforts to close a deal by Christmas foundered due to the length of time Pearson's advisers took to complete due diligence.
The acquisition is part of Pearson's strategy of expanding into independent television production. It owns Thames Television, one of the UK's largest producers, and last year paid pounds 175m for Grundy Worldwide, the maker of Neighbours, the popular soap. Subsequently, it agreed to buy the US-based TV distribution partnership ACI.
Pearson Television is expected to make further deals in 1996, under an aggressive expansion strategy developed by Greg Dyke, its chief executive and the former head of London Weekend Television.
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