Former Channel Five chief executive David Elstein has bought the international business of the Hallmark Channel for $242m (£127m).
Former Channel Five chief executive David Elstein has bought the international business of the Hallmark Channel for $242m (£127m).

After protracted negotiations, first revealed by Broadcast (8.7.04), he announced on Wednesday that he had finally clinched a deal with Crown Media using backing from equity houses 3i and Providence Equity Partners.

Elstein, who will have a minority equity stake in the business, will become chairman of the group and will put together a five or six-strong senior management team in the next couple of months.

Elstein and representatives of his investor group met Hallmark UK's management, headed by UK and EMEA chief executive Jeff Henry, on Wednesday afternoon to discuss the future of the company.

The deal, which will take six to eight weeks to complete, will give him control of the UK Hallmark Channel, the UK's sixth most popular multichannel entertainment service, as well as Hallmark Channel operations in a further 151 countries across the globe.

The deal also includes a library of over 580 Hallmark titles made before 2001, including Merlin, Moby Dickand Gulliver's Travels, the ongoing licence to use the Hallmark brand from Hallmark Cards and the Denver-based playout centre, which distributes the Hallmark Channel internationally.

Hallmark International, which has around 250 staff, lost $21m on $83m turnover in 2003. However, Hallmark UK produces a modest profit and is by far the strongest performer of the international businesses.

The deal ends a 10-month long process. Crown Media put the business up for sale in April after deciding to concentrate on its US interests.

Other bidders originally included News Corporation, Sony, Disney, Time Warner, Saban, MGM and Liberty Media.