Desmond set to bid for TV channel Five

$153 mil bid being prepared by OK! Magazine owner

LONDON -- The ownership of U.K. terrestrial broadcaster Channel Five is close to finally changing hands with newspaper magnate Richard Desmond hotly tipped as the front runner to buy the channel.

Desmond, the colorful owner of Daily Express, the Daily Star and OK! Magazine, is understood to be the front runner to buy Channel Five in a £100 million ($153 million) deal which could be signed as early as this week.

Media reports are heavily tipping Desmond to emerge victorious in a bidding war for the German RTL owned broadcaster.

But while Desmond is believed to have tabled the highest bid for the channel and is reported to have met up with media regulator Ofcom late last week to talk over his interest, other bidders are also in the running.

Fellow U.K. broadcaster Channel 4 and an unnamed U.S. broadcaster -- believed to be either Time Warner or NBC Universal according to press reports -- are also said to be in the running.

Desmond has made no secret of the fact he has a £1 billion ($1.53 billion) warchest to splash out on media acquisitions.

Five, home of the "CSI" franchise and daytime soap "Neighbours," has long been the problem child in RTL's pan-European channel portfolio. Last year, the network booked an operating loss of €41 million ($50 million), including €9 million ($11 million) in restructuring costs and €22 million ($27 million) in write-downs on the value of its programming acquisitions.

At the same time the value of its airtime inventory has hemorrhaged, causing RTL to write down the value of its investment in the British subsidiary to just $137 million last year, from $718 million two years ago. As the smallest of Britain's terrestrial nets, Five has been more exposed to the advertising slump and seen its audience share ratings slide. Last year it failed to renegotiate broadcast rights to one of its signature shows, "House," which it lost to Sky One.

Five launched in March 1997, becoming the U.K.'s fifth terrestrial broadcaster.

RTL Group declined comment.
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