Entertainment

Muppets For Sale (Again)

May 30, 2001 / 11:11 AM EDT / AP

The Jim Henson Co., creator of Kermit the Frog and the Muppets, is on the selling block again after the childhood icons were snapped up last year by German entertainment firm EM.TV AG, the company said Wednesday.

"We bought the Jim Henson Co. because its products and brands fit our company very well," said EM.TV spokeswoman Marion Moormann. "But in the meantime, EM.TV has got into several problems."

Munich-based EM.TV, whose stock market value has crashed since last year, has hired New York investment bank Allen and Company to help it decide whether to sell all or part of the Jim Henson Co. or whether it should sell a stake in the venture to a partner, Moormann added.

Another option would be for the current management at Jim Henson to buy its independence.

According to a report in Wednesday's Financial Times, Jim Henson Co. chief executive Charles Rivkin is drafting plans for a management buyout that would end EM.TV's brief ownership of the company.

Rivkin is canvassing U.S. equity houses to drum up an estimated $200 million needed for the deal, the report said.

EM.TV bought the Jim Henson Co. and rights to the Muppets in February 2000 for $680 million in cash and stock, but has since been pummeled by financial problems. Once a bright star among German media stocks, its share price has plummeted about 96 percent since last summer.

The stock tumbled again Wednesday at the news EM.TV is looking to sell the Muppets. Shares fell 6.85 percent to 3.13 euros ($2.69) by midafternoon trading.

EM.TV overstretched itself last March when it shelled out $1.6 billion for a 50 percent stake in the holding company that runs Formula One racing. It later increased that stake to 75 percent in another $987 million deal.

Aside from being financially strapped, EM.TV was also finding it too difficult to manage the Jim Henson Co.'s production studios in the United States from its headquarters in Germany, Moormann said.