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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