Hulu bids due - who will win its hand?
LOS ANGELES (TheWrap.com) - Bids for Hulu are due on Wednesday from a collection of tech and satellite giants -- with Yahoo, Google, Amazon and DirecTV among the likely contenders.
Apple, which was at one point sniffing around the video streaming company, seems to have abandoned the hunt.
Hulu is expected to draw bids of between $1 billion to $2 billion. A person familiar with the negotiations told TheWrap that early reports that bids might go as low as $500 million seemed off-base and that they could not imagine a deal getting done at that price.
A spokesperson for Hulu declined to comment.
Hulu engaged Morgan Stanley and Guggenheim Partners to explore a potential sale after receiving an unsolicited takeover overture earlier in the summer.
Hulu is jointly owned by Providence Equity, Disney, Comcast and News Corp., who have publicly indicated their willingness to divest themselves from the popular streaming service. But the price must be right.
After all, Hulu is growing quickly, and is expected to generate $500 million in revenues this year. That's almost double the amount it made in the previous fiscal year.
Some analysts, such as BTIG's Richard Greenfield, have been agitating for the media giants to retain control of the site.
"The bigger Hulu gets, the more dollars it can pay content creators on an annual basis," Greenfield wrote in a note this week.
For the bidders, Hulu represents an enticing target.
Amazon is reportedly gunning for the site, seeing it as a complement to its growing online video offerings and for the tablet its rumored to be readying for market.
Yahoo, which has struggled to keep up with Google, has made no secret of its desire to pump up its video offerings and capitalize on the higher ad rates they bring.
For DirecTV, Hulu represents a chance to dramatically expand its digital footprint, while Google, even after its $12.5 billion Motorola purchase last month, has the capital needed to snap up a big bauble.