Hulu Sale Called Off as Owners Try to Raise Extra Cash
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Walt Disney Co, Twenty-First Century Fox Inc and Comcast's NBCUniversal said on Friday they decided to keep their video streaming website Hulu and will invest $750 million to help it grow.
Hulu's owners still are talking to companies that could become partners for the service, a source with knowledge of the discussions said. One is Time Warner Cable, which had offered to make an equity investment in Hulu, two sources told Reuters. The role of future partners has not been determined.
Time Warner Cable spokesman Justin Venech had no comment. Disney spokesman Kevin Brockman had no comment beyond the company's statement. Fox spokesman Dan Berger could not immediately be reached.
This is the second time the media companies have considered selling Hulu but decided against it. They had collected bids for from parties including satellite provider DirecTV and former News Corp president Peter Chernin, sources had previously told Reuters.
The first time they considered selling Hulu was in 2011.
Comcast is restricted from making business decisions related to Hulu as part of its settlement with the U.S. government when it acquired NBC Universal.
Hulu's launched in 2008, attracts more than 30 million unique monthly visitors, the companies said. The service has more than 4 million subscribers and generates revenue of about $700 million through subscriptions and a free ad-supported service.
In a statement on Friday, Chase Carey, Fox's president and chief operating officer, said Hulu's owners "had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match."
"But with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team," Carey said.
DirecTV had offered more than $1 billion for Hulu, sources told Reuters.
After mulling the bids, the owners decided to put more money into Hulu to grow a business that attracts customers who watch TV shows and movies increasingly through Internet-connected televisions and mobile devices. Hulu competes with services such as Netflix Inc and Amazon.com Inc's Prime Instant Video service.
"Hulu has emerged as one of the most consumer friendly, technologically innovative viewing platforms in the digital era," Disney Chief Executive Bob Iger said in a statement.
Disney shares rose 0.4 percent to $66.84 in afternoon trading on the New York Stock Exchange. Fox shares gained 0.5 percent to $30.09, and Comcast shares climbed 0.5 percent to $44.48, both on Nasdaq.
(Reporting by Lisa Richwine in Los Angeles and Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty, Ken Barry and David Gregorio)