Financial News

  • 29 April 2014, 9:38

Discovery Enters Fray For Hollyoaks Producer

The US media giant Discovery Communications has joined the running to buy All3Media, the independent television production group behind Hollyoaks, Skins and other well-known UK drama series.

Sky News understands that Discovery approached All3Media's owner, the private equity firm Permira, several weeks ago with a view to holding talks about a takeover deal.

Discussions have been taking place since then, although Discovery faces rival interest from Fremantle Media, the producer of The X Factor and Britain's Got Talent.

An exclusivity period granted to Fremantle is said to have expired last month although it remains interested in a deal, sources said on Monday.

It is unclear how much acquiring All3Media will cost any buyer, although some media analysts suggested that the company's price tag could be in the region of 500m.

A deal at that price would fall well short of the 750m that Permira was reported to have been seeking when it ran an ultimately aborted auction of All3Media in 2011.

A so-called 'super-indie', All3Media has itself been built through a series of acquisitions, including that of Lime Pictures, maker of The Only Way Is Essex, and has been expanding its business in the US.

All3Media is run by Farah Ramzan Golant, a former advertising executive who also sits on the Business Advisory Group set up by David Cameron, the Prime Minister.

A takeover by Discovery would underpin the US company's international expansion plans, with its existing networks including the likes of Animal Planet and the Oprah Winfrey Network, a joint venture.

Discovery was also reported to be considering a bid for Channel 5, the UK terrestrial broadcaster, alongside BSkyB, owner of Sky News.

With a market value of more than $17bn, the Nasdaq-listed group could easily afford a deal to buy All3Media, although its negotiations are understood to be preliminary and far from certain to result in a deal.

A Discovery spokeswoman said the company did not "comment on rumour or speculation", while a spokeswoman for Permira declined to comment.

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