Time Warner looks to take over the Shed

Shed said Time Warner subsidiary Warner Bros Entertainment was "working with certain members of Shed management" as part of the discussions following mounting speculation of a deal.

It is thought the sale could value Shed at close to 75m.

Shed revealed two weeks ago that previous suitors Bowmark Capital and Darwin Private Equity had walked away from backing a management buyout, but said it had received another approach. It is understood Time Warner – the group behind blockbusters such as Sex and the City – wants to add Shed to a recently formed London-based production unit launched to tap into new markets following the international success of US shows, such as Gossip Girl.

Warner is said to be particularly interested in Shed because of several of its shows, including Supernanny, have already exported well to America.

Shed has an established Los Angeles production office and claims also to have a number of new programmes in production with US networks and cable channels.

The firm was founded in 1998 by Eileen Gallagher, co-creator of Bad Girls, who was previously managing director of London Weekend Television and deputy managing director of Granada Broadcasting.

Shed floated in 2005 and has taken over a raft of production houses since launch, now owning Ricochet, Wall To Wall, Twenty Twenty, as well as distribution company Outright Distribution.