The BBC is in talks with Channel 4 (C4) to make a £500 million (€565 million) bid to take full control of UKTV, according to The Guardian.
BBC Studios is already the owner of 50% of UKTV, but it wants a majority stake in the company as it is a major source of profit for the broadcaster, according to The Guardian. The other 50% is owned by Discovery.
The BBC does not have the financial capability to buy out Discovery and has been seeking a partner. In May it had also planned a £1 billion joint venture with ITV, but nothing came of the rumoured move.
Channel 4 has £190 million in cash reserves, which it could use as part of the strategic package toward a takeover of UKTV.
The commercial broadcaster is not allowed to own production companies, so it cannot follow rivals such as ITV in driving income from creating global TV hits, The Guardian states, but it is gaining pressure from advertisers shifting spend to digital firms such as Google. This could be a play that drives more profit.
UKTV already handles the £225 million-a-year TV ad sales contract for the broadcaster. Furthermore, UKTV profits have rocketed in the past decade jumping from £29 million to £90 million.
Discovery inherited its stake in UKTV with its Scripps takeover last year. It had plans to break up the network but the idea has not gained traction, according The Guardian.