US TV company a bargain at $40m
Pearson's hoped-for purchase of US television company ACI, now under negotiation, is likely to cost no more than $40m, the Independent has learned, and market rumours that the media and information giant would spend several times that amount have been squashed by insiders.
Pearson is seeking the rights both to ACI's back catalogue of mini-series and made-for-TV movies, and to its future productions. Analysts had been worried that Pearson was planning to invest heavily in the US production sector, the costliest segment of the television sector, and one where British firms have fared poorly in the past, but this would not be the case.
Suggestions over the weekend that the company would pay well over the odds for its US toe-hold helped push shares down 13p to 610p in yesterday's trading. The stock also went ex-dividend yesterday.
ACI is made up of several independent producers with an impressive track record in US television. The company supplies all three major US networks with programming, including "movies of the week" and high-budget mini- series.
The ACI talks are part of Pearson's declared strategy of expanding into the US market, and are aimed principally at developing the company's programme library.
Pearson, which owns Thames Television, paid pounds 175m for Grundy Worldwide, makers of games shows and soap operas such as Neighbours, earlier this year. With MAI, Pearson is also a member of a consortium bidding for the Channel 5 licence, and would be expected to supply programming for the new service.
The US talks are believed to be well advanced. Pearson is thought to be insisting on ironclad contracts with senior ACI management to guarantee rights to future productions.
The talks were confirmed over the weekend, but Pearson continued yesterday to decline any comment on the terms and the likely price.
It is believed that at least one other company is being wooed in the US. Pearson Television chief executive Greg Dyke, who is master-minding the acquisition search, is also relying on advice from executives of Grundy Worldwide.
o Carlton Communications, the UK media company run by Michael Green, is selling its California-based Abekas Video Systems to Scitex of Israel for $52m. Abekas sells specialist digital video equipment used by studios to create post-production special effects. It had sales last year of $55m.
Carlton, which holds the ITV licences for London week-day television, and Central, has said it intends to concentrate on broadcasting operations in the UK, continental Europe and the Far East.
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