HOLLYWOOD — The race to capture Kermit the Frog is on.
German media group EM.TV has hired blue-chip Wall Street investment firm Allen & Co. to conduct a sale of the Henson Co., Los Angeles-based creator of Kermit, Miss Piggy and the rest of the Muppet puppet family. The Walt Disney Co. is considered a lead suitor for Henson, and a management-led buyout bid is also in the offing.
The Henson auction, which had been expected (Daily Variety, March 14), comes little more than a year after Thomas Haffa’s Munich-based media group bought the company from heirs of founder Jim Henson for $680 million. But it’s believed a sale today will fetch less than half that, partly because rights to Sesame Street members of the Muppet clan were sold to producer Sesame Street Workshop for $180 million in December.
It also doesn’t help that EM.TV is conducting the sale with a gun to its corporate head. Amid a terrible cash crunch, Haffa recently sold a minority stake in EM.TV to rival German media concern the Kirch Group, and the Kirch investment came with a proviso that EM.TV would sell Henson.
Henson — now dominated by an array of non-Muppet TV projects plus three creature shops in the U.S. and England — produces healthy revenue of more than $150 million a year. But EM.TV has been criticized for unrealistic projections of how quickly the company could increase its profits, and Kirch is a longtime critic of Hollywood operations generally.
Henson CEO Charles Rivkin is believed to be well progressed in efforts to shore up backers for a management buyout of the company. Along with Disney, which has come close to buying Henson in the past, Viacom’s Nickelodeon kidvid unit also has placed discreet inquiries about a possible Henson purchase.
Allen & Co., which was formally retained by EM.TV on Tuesday, is expected to distribute briefing books to a dozen or so prospective Henson bidders within a month or two. Henson’s historic L.A. headquarters, one-time site to legendary Chaplin Studios, is still owned by the Henson family and thus is unlikely to be included in any sale.
Allen hopes to conclude its auction by fall and close on a sale of Henson by year’s end at the latest.