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Hulu Owners to Buy out Private Equity Firm's Stake for $200 Million (Report)

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The deal would value the online video joint venture, led by CEO Jason Kilar, at about $2 billion.

Hulu's entertainment conglomerate owners have a handshake agreement to buy out private equity firm Providence Equity Partners' 10 percent stake in the online video joint venture for $200 million, Bloomberg News reported.

The deal would value Hulu at around $2 billion and allow Providence to double the investment it made in the company in 2007.

Providence, which has held stakes in various other media and entertainment companies, including Univision Communications, has an option mid-year to sell its Hulu stake and has been widely expected to look for an exit after previously pushing for an IPO, which never happened. Late last year, fellow owners News Corp., Walt Disney and Comcast's NBCUniversal, which is a passive owner, were considering acquisition offers for Hulu, but decided to continue owning it.

NBCUniversal had to give up its Hulu board representation as part of its acquisition by cable giant Comcast and therefore hasn’t been involved in the discussions, somewhat complicating its role in the process, Bloomberg said.

What isn't clear yet is whether the conglomerates will split up Providence's stake in Hulu or bring in another outside investor, such as another private equity or financial firm. Just on Monday, former News Corp. president Peter Chernin, one of the original champions of Hulu, unveiled a $200 million capital injection from Providence into his Chernin Group.

Bloomberg said that as part of the deal the owners will allow staff, including Hulu CEO Jason Kilar, to sell shares in the privately held online video company.

Representatives for Hulu and Providence couldn't immediately reached for comment. Bloomberg said they declined comment.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai