Satellite television company DirecTV, Inc. (DTV) is among three bidders for Hulu LLC that are willing to pay in excess of $1 billion for the online video streaming service provider, according to media reports on Friday. This is the second attempt by Hulu's high profile owners to sell it after the failed sale and IPO attempt in 2011.
Hulu was earlier put on the block in 2011, with an expected minimum bid of $2 billion, but its owners subsequently retracted.
Hulu is owned by media giants News Corp. (NWS, NWSA), Walt Disney Co. (DIS) and Comcast Corp. (CMCSA). They are currently again exploring strategic options for the digital entertainment site including its sale.
A five year-old video service, Hulu offers ad-supported on-demand streaming video of TV shows, movies, webisodes and other new media, trailers, clips, and behind-the-scenes footage from a host of networks and studios. Last year, Hulu, which has about 4 million users, recorded revenues of around $700 million.
DirecTV, El Segundo, California-based largest U.S. satellite TV company, provides digital television entertainment to more than 32 million customers primarily in the U.S. and Latin America.
DirecTV could be interested in Hulu as it would help expand its "TV Everywhere" services, which makes TV shows available over the Internet to pay TV customers.
The identity of the two other $1 billion bidders is currently unknown. Meanwhile, DirecTV is said to be competing for Hulu with Yahoo, Inc. (YHOO), Time Warner Cable, Inc. (TWC), Kohlberg Kravis Roberts & Co. (KKR), Guggenheim Digital, and former News Corp. President Peter Chernin's investment firm Chernin Group. There is also a joint bid from Silver Lake Management LLC and William Morris Endeavor Entertainment LLC.
Yahoo is expected to give strong competition to DirecTV as its CEO Marissa Mayer has been beefing up her company's mobile and online products. Yahoo recently revealed plans to buy social media network Tumblr for $1.1 billion. It earlier made an unsuccessful bid to acquire a stake in French video site DailyMotion.
Meanwhile, Hulu is expected to trim down the list of bidders to focus on just two to three over the next few weeks to negotiate and find a winning bidder.
DTV closed Friday's regular trading session at $61.19, down $1.91 or 3.03% on a volume of 6.26 million shares.
For comments and feedback: editorial@rttnews.com