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Silver Lake, WME to Bow Out as Bidders for Hulu

Deadline for Hulu to accepts bids from buyers ends today

Silver Lake Partners and talent agency WME are no longer in the running to buy Hulu, as the deadline to accept bids for the company ends today.

The companies opted not to sweeten their initial offer and make a second bid for the Internet TV streaming service, according to a report by AllThingsD, citing unnamed sources. The amount of the first bid was not disclosed.

The field of bidders for Hulu still remained in flux, as of Friday morning, with DirecTV, Time Warner Cable, Guggenheim Partners, private-equity firm KKR & Co., in the running, along with AT&T, which has been in discussions with Chernin Group, led by former News Corp. COO Peter Chernin, to enter a joint proposal. DirecTV is still considered a favorite.

WME paired up with Silver Lake, its private-equity backer, on a bid to acquire Hulu in May. Silver Lake, which is focused on Silicon Valley startups, bought a 31% stake in the agency last year.

Yahoo is also unlikely to remain a final bidder, with its initial bid for Hulu described as low, according to one individual with knowledge of the negotiations. That individual and others have described Yahoo’s interest in the streaming site as having waned in recent weeks. Previous reports on Yahoo’s bid for Hulu have pegged it in the $600 million to $800 million range.

SEE ALSO: Yahoo Unlikely to Stay in Hulu Bidding

News Corp., Disney and Comcast put Hulu on the block in April, and the trio is said to be seeking in the neighborhood of $1 billion for the company.

Bids are said to have ranged from $500 million to $1 billion, according to sources familiar with the situation, far less than the $2 billion Hulu’s owners reportedly sought in 2011.

SEE ALSO: Here’s Who Should Own Hulu

Two of Hulu’s owners — Walt Disney Co. and News Corp. — are seeking to exit the business, which they see as strategically misaligned with their own interests. According to sources close to Hulu, News Corp. and Disney are hoping to reach an agreement on the sale process within the next eight weeks.

The third owner, Comcast’s NBCUniversal, is prohibited from exercising any management decisions regarding Hulu under the government’s conditions for the cable company’s takeover of NBCU.

(Todd Spangler and Rachel Abrams contributed to this report).

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