$300m Hallmark Channel deal attracts wide range of bidders

City view: Providence Equity Partners well positioned to snap up all or part of Hallmark Channel business

The international operations of The Hallmark Channel are up for grabs and could be snapped up by venture capitalist Providence Equity Partners.

They are being sold by US television company Crown Media Holdings, which wants to concentrate on Hallmark’s US business.

Providence is thought to be one of a number of bidders – including both trade buyers and private equity firms – which submitted first round offers for the non-US operations in May.

Crown Media is controlled by Hallmark Entertainment, a subsidiary of privately held Hallmark Cards which has annual sales of $3.8bn.

The business up for sale comprises Hallmark’s channels in the UK, Europe, Latin America and Asia. In the US, the Hallmark channel is focused on family viewing, but the international operations are much more wideranging than this and have been likened to five in the UK.

The entire deal is expected to be worth around $300m, and should be completed after bidders place final offers towards the end of July. Several bidders are understood to be looking at the possibility of making an offer for regional parts of the business.

The bidding is understood to have been dominated by trade buyers, although there are a number of interested venture capitalists. Both Providence Equity Partners and Crown Media declined to comment on the situation.

Providence Equity Partners, which is headquartered in the US, currently manages about $5bn of investments and has been involved in many of the large deals in the media sector over recent years.

Last year, together with Apax Partners and GS Capital Partners, it acquired Kabel Deutschland – a group of six German cable networks – from Deutsche Telekom for €1.7bn. Since then, it has been attempting to merge Kabel Deutschland with three other domestic cable networks – Iesy, Kabel Baden-Wuerttemberg and Ish – but is facing regulatory and competition-related hurdles.

There have been reports that the Kabel Deutschland consortium is not planning to buy content providers or more networks in Germany for anticompetitive reasons, but the Hallmark deal would not affect this, as the Hallmark channel is not present in Germany.

Also in Germany, Providence owns a stake in ProSiebenSat.1, the television provider that is headed up by Haim Saban, who has frequently expressed an interest in acquiring ITV in the medium term.

Just to make matters even more confusing, Hallmark has also been linked to a possible bid for ITV, in conjunction with David Elstein. However, as it is now selling its international businesses, this is no longer considered likely.

Additional reporting by Daniel Stawinoga

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