Discovery, Sky mull joint C5 bid

Discovery Communications’ acquisitions spree shows no sign of abating, with the US factual specialist reportedly eyeing a joint bid for the UK’s Channel 5 together with satcaster BSkyB.

According to the Financial Times in the UK and The Wall Street Journal in the US, the media conglomerate, controlled by John Malone, is ready to team up with Sky for a bid.

C5’s parent company, Northern & Shell, has detailed Barclays to scout out bids in the region of £700m (US$1.16bn) for the terrestrial channel, which it bought from RTL Group for £103.5m in 2010.

Some analysts have said the channel is overpriced and reports suggest that the Discovery/Sky offer may come up short.

The deadline N&S has set for bids is next Thursday. N&S chief Richard Desmond stepped down from the C5 board last week.

Sources close to the companies say that Sky would take over Channel 5’s advertising sales operation.

The move would be the latest shot in the ongoing battle between pay TV rivals Sky and BT in the UK. Sky has lost its prized rights to live Champions League football to BT, as well as some Premier League football and club rugby rights, as BT attempts to corner the UK’s triple play market of phone, broadband and TV.

It would also represent another significant move from Discovery, which has been growing aggressively through acquisitions over the last 18 months.

In December 2012, the company completed a US$1.7bn deal to buy the Scandinavian SBS channels business from Germany’s ProSiebenSat.1, and paid €170m (US$222m) for a 20% stake in Eurosport and several other TF1 stations, including TV Breizh, Histoire, Ushuaïa TV and Stylia.

In January, it completed a deal for a majority stake in Eurosport, under the terms of the initial deal with TF1, a year ahead of schedule.

Sky’s controlling stakeholder, Rupert Murdoch, and Discovery’s owner, John Malone, have not previously seen eye to eye. Malone built up an 18% stake in Murdoch’s News Corp which forced Murdoch to sacrifice a controlling stake in US pay TV platform DirecTV in order to buy it back. Discovery’s channels have always been carried on the Sky platform in the UK, however.