Two leaders emerge in Travel Channel bid

Talks are now focused on a joint venture

NEW YORK -- News Corp. and Scripps Networks Interactive are lead bidders for Cox Enterprise's Travel Channel, and talks are now focused on forming a joint venture to which the winning party would contribute some cable networks and cash, sources familiar with the matter told Reuters.

Valuation for the joint venture is currently above $900 million, but "it is a bit complex and is still being worked out," one of the sources said. All sources spoke on condition of anonymity because the details are not public.

The winning party will hold a roughly 65% stake in the joint venture, and the new company would assume debt to pay Cox a cash dividend, the sources said. But the majority stake has not been finalized and is still being discussed, one of the sources said.

Cox would contribute Travel Channel to the new company, while News Corp. would likely contribute the National Geographic Channel, that person said.

It was unclear which cable assets Scripps Networks would contribute if it won the auction, but it owns a variety of "fine-living" genre channels such as the HGTV, Do It Yourself and Food Network.

A joint venture with such a structure would help Cox avoid the big tax bill it inherited as part of its 2007 deal to swap its 25-percent stake in Discovery Communications Inc for the Travel Channel and $1.275 billion in cash, the sources said.

Private equity firms Kohlberg Kravis Roberts & Co., Thomas H. Lee Partners, and Providence Equity had also submitted bids for Travel Channel, but sources said their bids ranged between $700 million and $800 million.

The Travel Channel is known for programs such as "Anthony Bourdain: No Reservations," in which author and chef Bourdain travels the world to showcase local cuisines; and "Bizarre Foods with Andrew Zimmern," in which the food columnist tries unusual delicacies such as lamb eyeballs and squirrel brains.