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Debt-Laden German Firm May Sell Muppets Creator

March 14, 2001|From Reuters

Germany's EM.TV & Merchandising said Tuesday that it may sell Jim Henson Co., creator of the Muppets, a move that would draw the curtain on its costly dream of becoming a global media powerhouse.

The German media rights company, which acquired Jim Henson for $680 million last year, said it had not reached a final decision, but industry sources said the cash-strapped firm was keen to sell the asset as part of efforts to shake off its recent financial troubles.

The acquisition was part of a year-long buying spree, which included a half share in the rights to Formula One racing, that saddled the Munich company with crippling debts of more than $934 million. If EM.TV does sell, analysts said it would certainly get much less than it paid.

"EM.TV paid $680 million, and reports suggest that $200-250 million might be the bidding price by either Viacom or Disney," said Sarah Schmitz, media analyst at Commerzbank in London.

"While it's unclear how much they would get, they would almost definitely get less than what they paid."

U.S. media giant Walt Disney Co., which has harbored a long-term interest in the Muppets, is the obvious contender. Nickelodeon, the children's TV unit of U.S. media group Viacom Inc., also may be interested.

Disney Chairman and Chief Executive Michael Eisner already has been following EM.TV's recent woes for any sign that he may be able to pick up the Muppets at a reasonable price.

Jim Henson Co., founded in 1958, was best known for the Muppets characters, whose blend of irreverent humor and entertainment led by Kermit the Frog and Miss Piggy, won viewers in more than 100 countries.

The Los Angeles-based company also created characters such as Big Bird and Ernie and Bert from the children's television program "Sesame Street."

Industry sources said weaker-than-expected first-half earnings from Jim Henson and difficulty in running the U.S. firm from a distance had led EM.TV to consider a sale.

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