Disney Would Be Better Distributor for Muppets, Analysts Say
Walt Disney Co., the second- largest U.S. media company, would be better equipped to distribute the Muppets than their current owner, Germany's EM.TV & Merchandising AG, analysts said.
Disney Chief Executive Officer Michael Eisner said yesterday his company may be close to buying the Jim Henson Co. from unprofitable children's filmmaker EM.TV. Jim Henson, the creator of Kermit the Frog and Miss Piggy, died in 1990.
"It would make sense because Disney is an international brand and with its television channels has more possibilities than EM.TV to distribute the Muppets,'' said Marcus Moser, an analyst at GBC in Augsburg.
EM.TV CEO Werner Klatten is selling assets, including the Muppets, to cut debt amassed under former CEO Thomas Haffa. Haffa brought the company close to collapse after paying $680 million for Jim Henson Co. and more than $1.6 billion for a stake in Formula One car racing in 2000.
EM.TV earlier this month canceled an agreement with Dean Valentine, former head of Viacom Inc.'s UPN television network and Disney's TV production studio, to sell half of Henson, citing the need to renegotiate some of the terms. The company said it's also in talks with other potential buyers, without giving their names.
Eisner, answering questions at Disney's annual shareholders meeting, said a suggested price range of $100 million to $200 million was too high. "I would be very surprised if it was anywhere near the pricing you were discussing,'' he said.
The German company will use the proceeds of a sale to repay a 25 million-euro ($27 million) bank loan that comes due at the end of April, it has said. EM.TV had planned to complete the sale in January.
Shares in EM.TV rose as much as 8.8 percent to 74 cents and traded at 73 cents at 1:45 p.m. in Frankfurt. They've dropped 22 percent so far this year.
Jim Henson Co., founded by the late puppeteer of the same name 44 years ago, develops characters for "Sesame Street'' as well as newer shows such as "Bear in the Big Blue House'' for U.S. preschoolers and the science-fiction program "Farscape,'' which aired in the U.K. and recently was canceled.
Eisner worked on the first Muppets special in the 1960s and knew Jim Henson well, he said yesterday.