* Plans to launch more brands internationally
* Biggest deal for Viacom since split from CBS
(Adds CEO interview)
By Jennifer Saba
April 30 U.S.-based Viacom Inc said on
Thursday it would buy British TV broadcaster Channel 5 from
media baron Richard Desmond for $760 million (450 million
pounds) as a keystone to develop its worldwide presence.
Viacom, which owns a stable of cable channels such as MTV,
Nickelodeon, Comedy Central and movie studio Paramount Pictures,
said the deal would also allow the company to tap new ideas.
Channel 5 is the free-to-air network that broadcasts popular
hit shows such as reality show "Big Brother" and the crime drama
CSI franchise and has more than 43 million viewers per month,
according to the company.
"It was a unique opportunity," Viacom CEO Philippe Dauman
said about the deal, the largest to date for Viacom since it
split from broadcaster CBS in 2006.
"This gives us another significant base of programming," he
said, adding Britain was a leading center of creativity for
television and film.
Dauman cited Channel 5's "Milkshake!" a block of children's
programming that will complement Viacom's Nickelodeon kids
Viacom shares fell 1.2 percent to $83.95 in afternoon
trading Thursday on Nasdaq. The company also reported
third-quarter results and lower-than-expected advertising
Channel 5 was launched as the UK's fifth public-service
broadcaster in March 1997. It competes with ITV PLC,
Britain's largest free-to-air broadcaster, the BBC and
Channel 4 in the UK.
ITV's shares were up 2.19 percent at 186 pence at 1219 GMT
on the London Stock Exchange on Thursday.
Desmond sold Channel 5 for more than four times what he
bought it. His privately held Northern & Shell media group
bought Channel 5 in 2010 for 103.5 million pounds.
Desmond, who also owns the Daily Express and Daily Star
newspapers and OK! magazine in the UK, is credited with turning
the channel around by cutting costs aggressively and focusing on
cross-platform promotion and reality TV shows.
Viacom will finance the deal, which is subject to regulatory
approvals, with existing cash, and expects the acquisition to
add to earnings immediately after closing.
The media conglomerate, which is controlled by billionaire
Sumner Redstone, generated about 16 percent of its 2013 revenue
from Europe, noted Vijay Jayant, an analyst with ISI Media.
"This acquisition in one of the strongest markets in Europe
will help diversify the company's exposure," he said.
Channel 5 had reportedly drawn interest from more than 20
potential buyers, including Discovery Communications,
Scripps Networks and British Sky Broadcasting Group
BSkyB provides advertising sales for Viacom's channels like
MTV and Comedy Central in Britain. Dauman said Channel 5 would
retain its own separate sales force.
Barclays advised Northern & Shell on the deal and Rosenblatt
Solicitors acted for Channel 5 and Richard Desmond.
($1 = 0.5922 British Pounds)
(Reporting by Karen Rebelo, Richa Naidu and Supantha Mukherjee;
Editing by Richard Chang, Rodney Joyce, Sofina Mirza-Reid and