Walt Disney Co. (DIS) Chief Executive Officer Robert Iger said that the owners of Hulu LLC, the video- streaming service, are “committed to selling.”
Bankers for Hulu have met with Google Inc. (GOOG), Yahoo Inc. and Microsoft Corp. (MSFT) as the company explores a sale, people familiar with the process said last week. The 10 to 12 potential bidders Morgan Stanley (MS) and Guggenheim Partners have reached out to also include AT&T Inc. (T)
A sale would eliminate a conflict by setting up Hulu as an independent buyer of movies and TV shows for online viewing, said Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles. Hulu competes for content with the owners’ other online customers, such as Netflix Inc. (NFLX), he said.
Hulu may fetch more than $2 billion, according to data compiled by Bloomberg and SNL Kagan. The Los Angeles-based company hired bankers after a potential suitor expressed interest, people familiar with the matter said on June 21.
Under a new owner, Hulu may also gain capital to acquire more films and TV shows and challenge Netflix, the dominant subscription streaming service.
Hulu said today it will exceed 1 million users for its $7.99-a-month service by the end of the U.S. summer season, earlier than the year-end goal the company initially set. Netflix, based in Los Gatos, California, has 23 million customers and may generate $3.25 billion in revenue this year, the average analyst estimate in a Bloomberg survey.
Iger declined to comment on the specifics of any discussions or on whether movies and television shows would be licensed exclusively to Hulu.
“I don’t want to comment on any aspect of the deal,” he said. “It’s a good time to be in the content business though, the branded content business.”
Disney fell 40 cents to $39.57 at 4 p.m. in New York Stock Exchange trading and has climbed 5.5 percent this year. Netflix added $1.33 to $290.96 in Nasdaq Stock Market trading and has gained 66 percent this year.
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