Desmond to buy Channel Five 'by end of the week'

Northern and Shell, owned by media mogul Richard Desmond, bought TV channel Five (SUSANNAH IRELAND)

Richard Desmond, the newspaper proprietor and media tycoon, is expected to announce his purchase of Channel Five by the end of the week.

After weeks of speculation over the channel's future, Desmond, who already owns Express newspapers, emerged over the weekend as the front runner to buy the channel. He is understood to have assured Channel 5 of his intention to pay the estimated £20m bill for being part of the video-on-demand venture Project Canvas, partners in which include the BBC, BT and ITV, just weeks after RTL-owned Channel Five quit the initiative on cost grounds.

With several other challengers attempting to buy the channel, including Time Warner and John de Mol, the Dutch media tycoon behind Big Brother, Desmond and Dawn Airey, Channel Five's current boss, held talks with Ofcom officials last week, where he is reported to have made clear that he has no intention of handing back the channel's Public Service Broadcasting licence (which commits him to certain obligations relating to the provision of news content and other issues), which cemented his position as the front runner for the channel.

Reports last night indicate that Desmond and Gerhard Zeiler, RTL's boss, have earmarked this Friday to announce the Channel Five deal, which as it stands will cost the Express owner just over £100m.

Though no agreement has yet been signed, Zeiler is expected to tell other bidders (including Channel 4) in the next couple of days.

When Desmond, who has also been linked with moves for The Sun and ITV, spoke to The Independent last month he would not comment on speculation that he had submitted a bid for Channel Five.

If he does buy the channel, Desmond will be prevented from using Five to promote his publishing empire, including the Daily Express and OK!. But he will be able to use his publications to promote the channel in an attempt to drive up its tiny 6pc audience share. Desmond is expected to look for an advertising sales deal with either Channel 4 or BSkyB to increase its negotiating power with the media agencies who broker deals on behalf of advertisers. Desmond is already active in the television market through his Northern & Shell subsidiary Portland TV, which owns the Television X and Red Hot TV channels.

Five launched in March 1997, becoming the UK's fifth terrestrial broadcaster. The channel lost £37m in 2009 and RTL wrote down the value of its investment in the broadcaster from £500m in 2007 to £112m two years later. Mr Desmond bought Express Newspapers for £125m in 2000. Before that he founded his publishing company Northern and Shell in 1974, eventually obtaining the license to publish Penthouse in the United Kingdom which led to its publishing a range of adult titles including Asian Babes and Horny Housewives. It now publishes various celebrity magazines including OK! And New! Desmond was listed joint 57th in this year's Sunday Times Rich List with an estimated wealth of £950m.