LONDON — Flextech PLC, British arm of U.S. cable giant Tele-Communications Inc., took a 20% stake in broadcaster HTV Group PLC Thursday , in a deal that brings a new twist to the ownership upheaval under way in British television.
Until now, broadcasters in the terrestrial Independent Television (ITV) network — to which HTV belongs — have been gobbling each other up via takeovers.
Analysts said Flextech’s link with HTV, although a relatively small deal in financial terms, could mark the start of a trend to links between established ITV companies and broadcasters in the newer cable and satellite market.
“Up until now, it’s been very introverted: Channel 3 (ITV) companies taking over Channel 3 companies. Now we’re starting to see the next stage. Strategically, it’s quite a good move,” said David Forster, analyst at Smith New Court.
Flextech, which is majority owned by Tele-Communications Inc., is paying T27 million ($ 39.8 million) for the HTV stake, and funding the deal with a share issue.
Flextech has interests in or manages 11 cable or satellite channels broadcasting to Britain and continental Europe, including five carried on BSkyB’s multi-channel package.
It has little production capacity itself, but estimates say Britain’s need for programming hours could treble by the end of the century to 650,000 hours a year.
HTV is planning to produce 1,500 hours of programs in 1994 and hopes to cash in on more product demand from cable and satellite broadcasters.
Flextech said the value of programming needed by the end of the century had been estimated at T4.8 billion ($ 7.08 billion) in 1994 prices by consultants Booz Allen and Hamilton.
This would include a growing proportion of European production under British and European Union government policy.