Time Warner takes over Shed Media

Acquires 55.75% of U.K. TV indie production co. for $89 mil

LONDON -- Is Time Warner poised for a TV prodco buying spree in Europe? The studio Thursday announced its first acquisition in the U.K. and signaled that it was setting its sights on the rest of the continent.

The studio has agreed to pay around £56 million ($88.9 million) for a 55.75% controlling share in Shed Media, the TV indie production venture behind "Supernanny" and "Who Do You Think You Are?"

Unlike rival studios NBC Universal and Sony, which have a significant patchwork of production investments in different European markets, Warner has never invested in local TV production on the continent.

Instead it has limited its TV business to the film and TV output deals like the output deal it also announced Thursday with Channel 5, giving the terrestrial net rights to such series as "The Mentalist" and Jerry Bruckheimer's "Dark Blue."

But its strategy now seems set to change.

The Shed deal represents a whopping 47% premium on the prod co's closing share price in June the day before deal talks were officially confirmed.

The drama, factual and reality producer owns indies Wall To Wall, Ricochet and Twenty Twenty and is valued at £100 million ($158.6 million) under the terms of the agreement.

The acquisition gives Time Warner its first solid TV production foothold in the U.K., and head of international TV production Ronald Goes said the move would lead to expansion in other markets.

"The Shed Group's successful existing and future scripted and non-scripted programming adds programs and formats to our catalogue which can be leveraged internationally," he said in a statement to the London Stock Exchange.

"The acquisition of Shed will provide Warner Bros. Television Group with a solid foundation as we extend our local television production business to other major territories," he noted.

Thursday's deal is a fillip for the U.K. production sector, where production assets -- many swept up by private equity players in the boom years before the 2007 crash -- have largely languished in recent years, many failing to find a way back to listing on the financial markets.

But although the Shed deal, in Goes' own words, has given the studio "immediate scale," it is hard to see how Time Warner can suddenly begin to compete with the likes of international producers such as Fremantle, Elisabeth Murdoch's Shine Group and "Total Wipeout" creator Endemol, not to mention the midrange players like John de Mol's Talpa Media and Zodiak, which are each building their international business.

Doubtless when Time Warner boss Jeff Bewkes makes a rare public visit to London -- to deliver the keynote at the Royal Television Society's annual confab Sept. 28th -- all will be revealed.