Pearson in talks to buy SelecTV
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Pearson is in talks with management at SelecTV, the independent production company, that could lead to a bid within weeks, sources close to the negotiations said.
Separately, the media and information giant yesterday announced it had clinched a $40m deal to buy ACI, a US television programming supplier owned by eight leading US independent producers.
Sources close to SelecTV said talks were continuing between its chairman, Alan McKeown, and representatives from Pearson about the terms of a public offer for SelectTV shares. However, it is believed several other potential bidders remain in the frame, and that the two sides remain far apart on price.
Mr McKeown, founder of SelecTV, owns about 7 per cent, and is directly involved in the negotiations on behalf of the board. He is expected to recommend an offer from Pearson only at a large premium to the current market price of 31.5p, which values the company at about pounds 45m.
Other potential stumbling blocks include the terms on which Mr McKeown would continue to work with the company after a sale. Daily Mail and General Trust, which owns 14 per cent of SelecTV, is not directly involved in the negotiations at this stage.
Pearson is believed to have discussed a side deal with MAI that would see Lord Hollick's media and financial services company buy SelecTV's 19 per cent stake in Meridian Broadcasting, the ITV licence holder controlled by MAI.
Pearson is thought to be attracted by SelecTV's programming library and its indepen- dent production operations, which would be folded into Pearson TV.
It has no interest, it is understood, in the company's cable channel.
SelecTV makes such hit programmes as Birds of a Feather, Lovejoy and Love Hurts.
Pearson TV, run by Greg Dyke, the former LWT chief, already owns Thames Television and Grundy Worldwide, makers of Neighbours. The purchase of ACI, which has long been rumoured, gives Pearson a new source of programming revenues and access to an extensive library. ACI also has a supply deal with Channel 5 Broadcasting, the winning bidder for Channel 5, in which Pearson has a stake.
ACI supplies 20 per cent of the made-for-TV movies shown on US networks, and also buys programming from overseas. The eight key producers have promised to funnel their programming through ACI for at least five years.
Unaudited figures show an operating profit of $2.8m in the year to September 1995, before costs associated with the sale to Pearson, on revenues of $30.7m. Pearson is paying 24.5m in cash and loan notes, and another $20m over seven years.
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