This is taken from the Financial Times:

Bidders for BBC Broadcast told pension scheme must be retained
By Emiko Terazono, Media Correspondent
Published: May 17 2005 03:00

The BBC has insisted that bidders for BBC Broadcast, its commercial subsidiary which is up for sale, maintain a pension provision comparable to the final salary scheme currently available to employees.

Financial and trade buyers, who expect to learn whether they have made the shortlist next week, have been told the provision of similar arrangements is a condition of sale.

Prospective buyers have also been told they will need to keep the current management in place for an agreed length of time.

Maintaining similar pension arrangements will help head off industrial action. The pension provision for BBC Broadcast employees has been one of the issues raised by Bectu, the broadcasting union, which is preparing for a series of strikes at the end of this month.

Only 18 per cent of BBC Broadcast employees have voted to strike.

The BBC will sell the company only to buyers who accept the pension condition. "It is something that will be fiercely negotiated," it said.

The corporation said BBC Broadcast's pension scheme was in surplus, but agreeing to provide employees with an arrangement similar to the final salary scheme, which many companies now regard as a burden, was expected to reduce the amount interested parties were likely to offer for the subsidiary. "The pension consideration will be factored in," said one private equity bidder.

BBC Broadcast, which helps broadcasters and content makers distribute and promote digital content, is forecast to make pre-tax profits of £2m on revenues of £107m this year, and offers have been around £150m. About 80 per cent of BBC Broadcast's revenue comes from the BBC, and there are long-term contracts with the corporation that the buyer will acquire.

Eighteen bidders, including private equity groups such as Apax Partners, Bridgepoint and The Carlyle Group, and trade buyers including Ascent Media and Thomson, have made the long list. Next Wednesday the BBC expects to announce a shortlist of three to five organisations, which will be offered financial details of BBC Broadcast, to conduct due diligence.

The corporation, which expects to reach an agree ment by July, hopes to complete the sale by the end of the summer.

So far many financial and trade buyers have been stumped by the arduous auction process. They have had to put in an application and be interviewed by a panel of BBC executives before they could gain access to financial information, which they regard as barely sufficient to put in an indicative offer. "It doesn't feel like a company which wants to sell an asset," said one bidder.

The corporation said: "The business will do better with new ownership but we are choosing a partner we can work with. We don't have to sell."