Could Weather Co. Sale Lead to Digital, TV Being Split?

Owner of Weather Channel Hires Morgan Stanley, JPT to Explore Sale

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Owners of the Weather Channel have hired the banks Morgan Stanley and PJT Partners to explore a sale, according to people familiar with the matter.

Preliminary discussions have taken place with technology and media companies, said the people, who asked not to be named because the talks are private. Blackstone Group, Bain Capital and Comcast Corp.'s NBCUniversal acquired the company for about $3.5 billion in 2008.

The Weather Co., which began weighing a sale last year, is considering selling only its digital business, which has a much higher value than the cable network, two of the people said. Separating the businesses would be difficult and would present a hurdle to a sale, one of the people said.

The businesses are valued by the owners at more than $3 billion today, with most of that tied to the digital operations, one of the people said. It's possible no deal occurs at this time, the person said.

Shirley Powell, a Weather Co. spokeswoman, declined to comment, as did John Demming, a Comcast spokesman, Blackstone's Paula Chirhart, and a spokeswoman for Bain.

PJT is a boutique investment bank founded by Paul J. Taubman, formerly Morgan Stanley's investment bank co-president. Mr. Taubman didn't return a call seeking comment, while Mary Claire Delaney, a Morgan Stanley spokeswoman, declined to comment.

Comcast wrote down its investment in the Weather Channel by $250 million in the quarter ended June 30, valuing its stake at $86 million. In an interview with TheWrap last month, Weather Co. CEO David Kenny likened the cable TV business to Netflix Inc.'s DVD business -- profitable but no longer growing.

The Weather Co.'s digital businesses include The Weather Channel's website, Weather.com, Weather Underground and Weather Services International.

Weather Channel, which is distributed to more than 100 million U.S. households, could be sold to another cable network operator, while the weather data could be acquired separately by a technology company, two of the people said.

Two-thirds of U.S. consumers over 18 years old use a Weather Channel brand monthly, according to the company website.

Bloomberg News reported last year that the buyout firms were interviewing bankers to sell the businesses.

--Bloomberg News

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