April 6 (Bloomberg) -- Peter Chernin, the former News Corp. chief operating officer, offered at least $500 million for Hulu, the online television service he helped found, two people with knowledge of the situation said.
Chernin submitted the bid for Los Angeles-based Hulu last week, said the people, who sought anonymity because the talks are private. The price doesn’t include Hulu’s $330 million in debt and would increase with additional content rights and longer contract terms, they said.
Hulu’s controlling owners, Rupert Murdoch’s News Corp. and Walt Disney Co., are weighing whether to sell Hulu or buy each other out. As No. 2 at News Corp. in 2007, Chernin helped start Hulu, which offers free and subscription online video. He now has his own media company, Chernin Group, with investments in television, film and digital media in the U.S. and Asia.
The offer was reported yesterday by Reuters. Charles Sipkins, Chernin’s spokesman, declined to comment. Elisa Schreiber, a spokeswoman for Hulu, declined to comment.
Disney, based in Burbank, California, and New York-based News Corp. each own about one-third of Hulu and have management oversight. Co-owner Comcast Corp. is barred from an active role by regulators following its 2011 NBC Universal acquisition.
About a year ago, Hulu repurchased a 10 percent stake from Providence Equity Partners Inc. for about $200 million. The private-equity company had invested $100 million to help start the venture.
Hulu’s owners canceled a sale of the website in October 2011 after bids fell short of the $2 billion asking price.
Hulu offers free reruns of television shows and movies, with newer programming and earlier access available on its $8-a-month Hulu Plus. It generated about $700 million in revenue last year. The company is searching for a chief executive officer following the departure last month of Jason Kilar. Andy Forssell is acting CEO.
Chernin left News Corp. in 2009 and started Santa Monica, California-based Chernin Group, receiving a $200 million investment from Providence in April 2012. He is on the boards of Twitter Inc. and Pandora Media Inc., in which he is an investor.
His company produced “Rise of the Planet of the Apes.” It is looking for media investments in the U.S., India, Indonesia and China. His latest picture, “Oblivion” with Tom Cruise, opens April 19.
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