Aug 29 (Reuters) - A&E Networks is close to taking a 10 percent stake in Vice Media that would value the company at $2.5 billion, a Vice Media spokesman confirmed on Friday.
A&E, which is jointly owned by Walt Disney Co and media group Hearst Corp, is investing $250 million in Vice Media, which started as a Canadian magazine and has ballooned into a multimedia conglomerate known for producing edgy videos and news reports.
The deal was first reported by the Financial Times.
Vice Media Chief Executive Officer Shane Smith told the FT that it is a great deal. “It means we can preserve our independence and it gives us a war chest for another three years of dramatic growth,” he said.
The potential deal comes not long after Time Warner Inc was reportedly set to invest in Vice with the idea of combining it with Time Warner’s HLN news network. Time Warner’s investment at the time would have valued Vice Media at $2.2 billion.
Rupert Murdoch’s Twenty-First Century Fox Inc took a 5 percent stake in Vice last year for $70 million valuing the company at about $1.4 billion.
Vice has been searching for a cable outlet - though it currently produces shows for Time Warner’s HBO channel - to distribute its programming and news to a wider audience.
With A&E, Vice will produce programming for the cable network.
Vice is one of many new media companies that has seen an influx of dollars lately. Venture capital firm Andreessen Horowitz invested in August $50 million in BuzzFeed, the social news and entertainment website known for producing advertising sponsored content and list-format articles that go viral.
Reporting by Jennifer Saba in New York; Editing by Lisa Shumaker