Friday, May 24, 2013

Yahoo Reportedly Places Bid To Buy Hulu

Add one more name to the Hulu bidding war Yahoo!, which just announced plans to buy Tumblr for $1.1 billion, has made an offer on the video website as well.

The Web giant submitted a bid for the video site this morning, according to a person familiar with process. Other people looking to buy all or a piece of Hulu include:
  • Directv,
  • Time Warner Cable,
  • William Morris Endeavor, along with with PE backer Silverlake,
  • KKR,
  • Guggenheim Digital,
  • The Chernin Group
As AllThingsD reported earlier this month, Yahoo! CEO Marissa Mayer and COO Henrique De Castro have met with Hulu’s team recently for a get-to-know-you; Yahoo! had previously tried to buy a large stake in French video site Daily Motion, but that bid was stymied by the French government. Yahoo! declined to comment.

The question, as it always is with Hulu, is what its owners News Corp., Disney and Comcast are actually willing to sell, and at what price. The three media conglomerates provide the site’s most valuable programming, primarily via shows that have already aired on their broadcast networks. Disney and News Corp. have been at odds about the best way to manage the site for some time; Comcast gave up its management rights as a concession to Federal regulators a few years ago. (News Corp. also owns this website.)

In 2011, Hulu’s owners put the company up for sale and were looking for a bid of at least $2 billion; in exchange, they would offer content licenses that would run for two to three years. But they ended up pulling the site back off the sales block after a few months.

Last month, former News Corp. COO Peter Chernin submitted a starting bid of $500 million, with the understanding that he would be willing to pay more for extended licenses. Bloomberg first reported on the KKR and William Morris Endeavor/Silverlake bids today.

Hulu hasn't had a formal M&A process, but had asked prospective bidders to make an offer by Wednesday. That deadline apparently isn't a firm one, so it’s worth wondering if the field will grow more crowded before this over.

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