Scripps Networks Interactive has confirmed it has reached agreement to purchase Virgin Media’s 50% holding in UKTV, Britain’s second largest provider of multichannel television services.
It has also emerged that BBC Worldwide is looking to increase its stake to 60%, a move that would require the approval of the BBC Executive and BBC Trust. Scripps’ newly acquired voting rights and board representation would be unaffected.
The US company behind brands including HGTV, Food Network, Travel Channel, DIY Network and Cooking Channel will pay a total of £339 million (€387 million) for UKTV, whose portfolio includes Home, Good Food, Dave, Watch, GOLD, Alibi, Eden, Blighty, Yesterday and Really. £239 million will cover Virgin Media’s 50% common equity interest, while the remaining £100 million is for the outstanding preferred stock and debt owed by UKTV to Virgin Media.
The remaining 50% in UKTV is held by BBC Worldwide, which has been a significant provider of programming, since the launch of UK Gold in November 1992. UKTV itself was formed in 1997.
“UKTV is a significant opportunity for Scripps Networks Interactive to participate in a thriving multi-channel, dual revenue stream media business in one of the world’s largest television markets,” said Kenneth Lowe, chairman, president and chief executive officer of Scripps Networks Interactive. “Making a solid investment in UKTV and entering into a strong partnership with BBC Worldwide reinforces our core international strategy which we believe will create significant long-term value for our shareholders.”
A merger between Scripps Food Network – launched in the UK and Europe in 2009 – must surely be under consideration.
“The new agreement we are developing will bring benefits to UKTV’s audiences in the way they can consume content and will help to sustain UKTV’s track record of growth,” said BBC Worldwide chief executive John Smith. “It will create the opportunity to drive further value from digital rights on behalf of our stakeholders, particularly our shareholder, the BBC.”
The move marks Virgin Media’s exit from the content sector following the sale of its VMtv business, which included Living TV, to Sky 14 months ago.
The transaction is subject to regulatory approvals in the Republic of Ireland and Jersey.