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Next round of bids for Weather Channel due in May-sources
Thu Apr 10, 2008 7:16pm EDT
By Jui Chakravorty Das
NEW YORK, April 10 (Reuters) - A handful of media companiesare gearing up to submit second round bids for the Weather Channel, although a sale of the asset could go for significantly less than the $5 billion its owners originally sought, two sources familiar with the situation told Reuters.
Fewer than five companies are putting together the second-round bids, which will be due in early to mid-May, the sources said. All the bidders are media companies and the buyer, likely to be announced by early June, could pay as low as $3 billion for the U.S. cable network, the sources said.
Separately, another source briefed on the matter said Time Warner Inc (TWX.N: Quote, Profile, Research) is in talks to buy the Weather Channel from privately held Landmark Communications. Landmark announced earlier this year it hired JP Morgan and Lehman Brothers to study its options.
Several sources told Reuters last month that General Electric Co's NBC Universal (GE.N: Quote, Profile, Research), CBS Corp (CBS.N: Quote, Profile, Research) and Comcast Corp (CMCSA.O: Quote, Profile, Research) had examined the financial materials that were assembled for the auction.
It is unclear if any of those companies made a bid for the channel. CBS declined comment and Comcast was not immediately available for comment.
In an interview with Reuters earlier this week, NBC Universal Chief Executive Jeff Zucker declined to comment on whether NBC had made a bid for the Weather Channel but said: "The Weather Channel is a very good opportunity and certainly something we would take a look at."
While considered a prized asset, auction of the Weather Channel has failed to attract private equity as the credit crunch has restricted financing for major leveraged buyouts, sources have said.
The Weather Channel appeals to media companies looking to enter cable or expand their holdings, since the network's time-sensitive broadcasts and programming about hot-button issues on the environment have proven to be attractive to audiences and advertisers, industry experts have said.
The Weather Channel produces continuous, 24-hour national, regional and local weather-related programs and is received by more than 96 million U.S. households. It can be seen in more than 97 percent of all cable TV homes nationwide.
The channel's accompanying Web site attracts about 35 million unique users each month, Landmark said. That puts it among the Web's 20 most popular sites, and the top destination for online weather, news and information.
Landmark, based in Norfolk, Virginia, declined to comment on the auction process.
Landmark's interest in selling The Weather Channel comes amid broader shifts in the cable TV landscape. Discovery Communications, which includes, the Discovery Channel, Science Channel and Animal Planet networks, is expected to become a publicly traded company in the second quarter.
Sundance Channel, the joint venture between CBS, NBC Universal and Sundance founder Robert Redford, also is for sale, according to one of the sources.
In addition, IAC/InterActiveCorp (IACI.O: Quote, Profile, Research) is spinning off its HSN shopping network as part of a larger restructuring, and E.W. Scripps Co (SSP.N: Quote, Profile, Research) plans to split itself into two publicly traded companies, one that will center on its cable channels and another that will include its newspapers and broadcast TV stations. (Additional reporting by Kenneth Li and Paul Thomasch) (Reporting by Jui Chakravorty; 646-223-6033; editing by Carol Bishopric)
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