Scripps Networks Interactive has concluded a £339 million (US$553.2 million) deal to acquire Virgin Media’s 50% stake in UKTV, the British cable network that houses channels including Home, Eden, Yesterday, Good Food and Really.
Scripps will pay approximately £239 million to buy Virgin Media’s equity interest in the UKTV partnership, paying an additional sum of about £100 million to acquire the outstanding preferred stock and debt owed by UKTV to Virgin Media.
BBC Worldwide (BBCWW), the commercial arm of the UK public service broadcaster, owns the other 50%. As part of the deal, Scripps and BBCWW are negotiating an agreement whereby, after completion, BBCWW would have the option – via a combination of cash and a package of digital rights for UKTV – to increase its shareholding from 50% to a maximum of 60%.
Scripps’ existing voting rights and board representation would be unaffected by this proposed arrangement, which would be subject to approval from the BBC’s executive body and its governors, the BBC Trust.
“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 Scripps Networks Interactive’s chairman, president and CEO Kenneth W Lowe.
“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.”
The move further builds Scripps’ presence in the UK. The company, which runs U.S. nets including The Cooking Channel and the DIY Network, currently operates The Food Network in the UK and Europe as part of a partnership with Chello Zone.
UKTV attracts about 36 million viewers a month, according to Scripps, across its portfolio of 10 non-fiction, lifestyle and entertainment channels. In addition to the aforementioned nets, other channels in the portfolio include Dave, Watch, Gold, Alibi and Blighty.
BBCWW CEO John Smith said: “The launch of UKTV in 1997 created a new secondary platform for content from the BBC and UK independents that has delivered great value back to all stakeholders. We thank Virgin Media for the part it has played in developing the business into one of the most successful pay-TV companies in the UK.
“We welcome Scripps Networks Interactive as our new partner and look forward to working with them to open up further avenues to success. 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.”