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Private equity firms interested in Travel Channel acquisition

3 Sep 2009

Private equity groups have been presented a tempting opportunity by the Travel Channel, a majority stake in which has been up for sale since June, according to the Financial Times.

A firm could benefit from the acquisition because the sale is structured as a leveraged partnership in which the channel’s owners, Cox Communications, are guaranteeing the debt. This could lower a buyer’s potential cost of borrowing.

Offers for a majority stake in the Travel Channel from a variety of bidders have come in more rapidly than expected, reflecting the rush by media companies to build up the relatively resilient cable television industry, the report said. The second-round offers for a 65 per cent stake in Cox Communications value the Travel Channel at $800m or more.

One likely buyer is Scripps Networks Interactive, owner of the Food Network. It is among three bidders who have been told they are through to a further round.

News Corp has also put in a strong offer, bidding through its majority-owned National Geographic Channel. Discovery Communications is another likely candidate, presenting a more aggressive bid since turning to private equity groups to fund its offer.

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