Weather Deal Could Break Soon7/04/2008 8:00 PM Eastern
Sale negotiations for The Weather Channel appear to be winding down, with some people familiar with the process saying before the July 4 holiday that a deal could be done in the next few days.
Weather Channel parent Landmark Communications said on June 13 it had entered exclusive negotiations with a group including NBC Universal and private equity firms Bain Capital and The Blackstone Group. That came after Landmark initiated an auction for the network and its related web site in January.
Early on it was believed Landmark wanted as much as $5 billion, which would have made it the priciest deal for a cable network since The Walt Disney Co. paid $5.3 billion for Fox Family Channel (now ABC Family) in 2001. More recently, network deals have been smaller: NBCU paid $875 million for Oxygen and Rainbow Media Holdings bought The Sundance Channel for $496 million, much of that in General Electric stock.
CBS, Viacom and Liberty Media showed early interest, but the auction boiled down to two players: Time Warner Inc. and NBCU. Time Warner dropped out, leaving only the NBCU group.
Several people familiar with the process said the NBC group had been expected to pay about $3.5 billion for Weather. But that price might have dipped as the bidders dwindled.
“Once you only have one buyer, you lose a little bit of leverage,” one executive familiar with the process said, adding that Blackstone may be trying to negotiate a lower price. “Private equity partners are good for capital but they are known for re-trading.”
Officials at NBC Universal and Blackstone declined to comment. Landmark Communications CEO Decker Anstrom did not return a call for comment.
People familiar with the auction process said the talks are progressing.
“They're in the nits and picks stage,” one cable executive familiar with the auction said last week. “Expect an announcement soon; in the next few days. My understanding is it's just the lawyers [holding it up] — it's a complicated deal, just papering it is not easy.”