Will Hulu fetch $2 billion? Don’t expect any sale announcement soon, but the bids are in and it looks like some big names will move to the next round and get a closer look at what they’re bidding to buy.
Reports by Bloomberg, Reuters and the Wall Street Journal said first round bidders included Google, Amazon.com, Yahoo!, Dish Network and DirecTV. Those going forward to round two will sign non-disclosure agreements and get to see detailed financials from the privately held company.
The Walt Disney Company has been pushing for the sale. What remains to be seen is whether co-owners News Corporation, NBCUniversal and Providence Partners will agree to a sale if no one gets close to the $2 billion asking price.
Wells Fargo Securities analyst Marci Ryvicker told clients she was not surprised to see Dish in the bidding, since new CEO Joe Clayton had publicly mentioned Hulu as a company he’d like to buy.
“Two things to keep in mind here: 1) DISH is still Charlie Ergen’s company, and Mr. Ergen does not tend to overpay when it comes to acquisitions, in our view. 2) Hulu could fit nicely into Mr. Ergen’s longer term plans, which we believe includes an over-the-top service,” Ryvicker said in a quick note.
RBR-TVBR observation: Our prediction…and this is just gut instinct…is that this will come down to a bidding war between Google and Amazon. Flip a coin for which one puts up the most cash and wins. But then they have to figure out how to renew Hulu’s content contracts with its former owners, who will no longer have any incentive to leave any money on the table.