Warburg Pincus Sells Channel 5 Stake To Shareholders

The three main shareholders in Channel 5 have confirmed today that they are to take up their shares of the stake currently owned by Warburg Pincus. The US investment bank began formal proceedings to sell its 18% stake in the channel in November (see Warburg Pincus To Sell Stake In Channel 5) and United News & Media, Pearson, and CLT-Ufa were given until the end of today to make their decision.

The £171 million Warburg Pincus stake will be bought by each of the three main shareholders for £57 million each, increasing the holdings of CLT-Ufa and United News & Media to 35% each and Pearson’s holding to 30%.

When Warburg Pincus, the US investment bank which has had an interest in the channel since its inception, decided to sell its stake last year a number of provisional bids were made, including one from pay-TV group Flextech (see Warburg To Finalise Price For C5 Stake Sale). The price of the bids made was used to set a price for the existing shareholders, which then had the option of matching any external offer to buy the stake.

United News & Media’s increased holding in Channel 5 will cause problems for its planned merger with Carlton Communications (see Carlton And United News & Media Set For £7.8bn Merger). With the additional interest in the channel the merged Carlton-United group will exceed the share of viewing permitted by one group, which currently stands at 15%.

A spokesperson for UNM was optimistic today that the increased stake would not cause problems. “We are keen to maintain as high a stake as possible in Channel 5, which has so far proved a valuable investment. We will be talking to the regulators to resolve the situation and allow us to hold the stake in keeping with the Broadcasting Act,” he said.

Channel 5: 020 7550 5555 Warburg Pincus: 020 7306 0306 United News: 020 7921 5000 Pearson: 020 7411 2000