BBC Worldwide wins DVD battle

Corporation to nab remainder of 2Entertain

LONDON — BBC Worldwide has won a court case against the administrator of U.K. retail store chain Woolworths over the value of their 2Entertain DVD joint venture.

The High Court ruling, which is likely to be challenged by the administrator Deloitte, opens the door for Worldwide to acquire Woolworths’ 40% stake in 2Entertain at a bargain price.

The dispute involves whether a licensing agreement allowing 2Entertain to distribute and manufacture DVDs containing BBC material lapsed when Woolworths’ went bust and Worldwide’s right to buy the retailer’s stake in 2Entertain.

But Deloitte argued there was no such lapse and they should be able to sell the rights at a commercial rate to Worldwide.

Prior to the collapse of Woolworths last November, Worldwide, owner of the remaining 60% of 2Entertain, was prepared to pay around £100 million ($165 million) for the retailer’s share of the DVD publisher.

In the wake of the store’s insolvency, lawyers representing Worldwide insisted that the value of the holding had plunged since negotiations over the stake began last fall.

A BBC Worldwide statement said it was “pleased, but not surprised” that the court had upheld its “contractual rights” to acquire Woolworths’ 2Entertain stock.

“Deloitte has challenged the rights that BBCW and Woolworths agreed at the inception of the joint venture,” added Worldwide.

“BBCW has successfully defended those rights in court and will continue to take all necessary steps to enforce them in the interests of our stakeholders.”

The dispute over 2Entertain could have implications for negotiations between BBC Worldwide and Channel 4 over their proposed joint venture since 2Entertain is a potential although not core component of any tie-up.

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