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updated 9/8/2004 1:28:43 PM ET 2004-09-08T17:28:43

The BBC has invited Time Warner, Bertelsmann and Walt Disney to discuss possible bids for BBC Worldwide, the corporation's commercial sales and publishing arm.

BBC executives believe the Worldwide division, which generated free cashflow of $250 million in the 12 months to March 31, could be worth up to $2.4 billion.

Executives from the media companies are to hold talks with the BBC in the coming weeks over assets including the BBC America and BBC Prime channels, along with 26 magazine titles, merchandising operations and the broadcaster's overseas program sales unit.

The publicly-funded UK broadcaster is considering the move as part of an internal review, timed to coincide with a government study of the BBC's funding and public service remit.

Insiders at Time Warner and Disney confirmed Wednesday that they had been approached, but declined to comment. Nevertheless, one executive said: "It's a very interesting set of assets with enormous heritage and an important library of programming. Of course we will look at it."

But Bertelsmann responded coolly to suggestions of a potential offer. The corporation has asked four investment banks — Rothschild, Deutsche Bank, Morgan Stanley and CIBC of Canada — to examine the business, which could lead to a sales mandate.

John Smith, the BBC's chief operating officer and finance director, yesterday met the top 100 executives of Worldwide which employs 2,200 people to discuss options. He was told that profits could double to more than $85 million in the medium term as the business exploits growing international demand for BBC programming and merchandise.

An outright sale, however, could trigger change of control clauses at the division, which has several channel partnerships, notably its UKTV joint venture with Flextech, part of the Telewest cable group, and its factual programming tie-up with the Discovery network in the U.S..

Both Discovery and Telewest have been invited to discuss the future of Worldwide, whose chief executive, Rupert Gavin, is standing down this autumn.

Mr. Gavin is considering putting together a buy-out proposal, backed by potential private equity partners, to develop Worldwide as a standalone international programming sales and publishing company.

Recommendations from the commercial review, in which the BBC will also consult rival broadcasters at ITV and Channel Four and publishers such as Emap, are expected at the end of the year. The favored proposal will be outlined in a memorandum and submitted to bidders.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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