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U.S. Group to Buy Stake in Muppets

December 24, 2002

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BERLIN (AP) _ German media company EM.TV said Tuesday it has signed a letter of intent to sell a U.S. investor group a 49.9 percent stake in the Jim Henson Co., creator of Kermit the Frog and the Muppets.

EM.TV, which bought the Jim Henson Co. and rights to the Muppets in February 2000 for $680 million in cash and stock, expects to finalize the deal next month. The investment group is led by former UPN president Dean Valentine and investment company Europlay Capital Advisors.

EM.TV has not publicly named a price, and declined to comment Tuesday on the value of the deal.

The German company said that following the sale Valentine, who stepped down earlier this year as head of UPN, would be in charge of operations at the Los Angeles-based Jim Henson Co.

``We are committed to continuing the legacy of creativity, humor and humanity that marked everything Jim Henson touched,″ Valentine said in a statement. ``At the same time we feel there is enormous potential for growth, not merely from Kermit and the Muppets, but from the expansion of the Henson brand into all areas of family entertainment.″

Werner Klatten, EM.TV’s chief executive, stressed that his firm ``will remain as the majority owner of the Jim Henson Co. and will continue to have an important presence in the U.S. market.″ EM.TV will remain the company’s international distributor.

EM.TV first expressed interesting in selling Jim Henson Co. more than a year ago in May 2001. Aside from being financially strapped, EM.TV said it was finding it too difficult to manage Jim Henson Co.’s production studios in the United States from its headquarters in Germany.

The company said Tuesday that the sale would allow it to finish paying back a loan that financed the acquisition of its stake in Junior TV, a joint venture with the now-bankrupt KirchMedia.

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