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Muppets up for sale
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March 13, 2001: 5:35 a.m. ET
Germany's EM.TV mulls the sale of Kermit & Co. to boost finances
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LONDON (CNN) - Germany's EM.TV & Merchandising is considering the sale of the Jim Henson Company, creator of the Muppets, the company said on Tuesday.
The troubled media rights group only bought Henson last year, but the U.S. firm's performance has proved "very disappointing", according to one person familiar with the company's thinking.
An EM.TV spokeswoman said a sale is being looked at, though a final decision was weeks away, rather than days. She refused to comment on why the firm should wish to back out of its investment so soon after making it. 
Walt Disney (DIS: Research, Estimates) and Viacom (VIA: Research, Estimates) unit Nickelodeon have expressed an interest in buying the unit, but neither was likely to match the $680 million EM.TV paid last year, Germany's Handelsblatt reported.
An EM.TV source told CNN.com that both those firms "had always been interested in Henson."
The Muppets creator has proved a major drag on EM.TV's shaky finances; its poor profitability and the difficulty EM.TV has found in managing a U.S.-based business from Germany are thought to be behind the potential sale.
EM.TV wouldn't comment on whether it had retained an investment bank to advise it on a sale. New York-based Allen & Co. advised it on the original acquisition.
The company insider told CNN.com that EM.TV had to consolidate some of its investments to keep the firm running. It owns a substantial library of children's TV programming.
EM.TV went on a spending spree last year, acquiring the Jim Henson Co. and a half share in the rights to Formula One motor racing. Those acquisitions saddled EM.TV with debts estimated at more than  1 billion ($900 million), forcing it into a rescue deal with media giant Kirch Group.
EM.TV's stock has fallen more than 95 percent since March 2000. The Henson family received a total of 9 million EM.TV shares in lieu of 50 percent of the purchase price.
On Tuesday EM.TV (AETV) shares fell 0.5 percent to 6.42. 
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