A formal auction process for Endemol, the TV production company responsible for the controversial Channel 4 show Big Brother, is expected to begin within weeks after Spanish owners Telefonica reportedly met today with Merrill Lynch.

According to the Times, Telefonica appointed Merrill Lynch some time ago to advise on a potential sale of its 75 per cent stake in the company. The paper added that an announcement over sale talks could come within the first quarter of the year.

Earlier this month, Endemol bought out its French Unit, Endemol France, which had been kept separate due to a dispute over an earn-out. The €450m deal removed what has widely been seen as the main barrier to a sale. 

Endemol has already attracted a high degree of private equity interest, with Hellman & Friedman, Providence, Apax Partners, Permira, CVC and Cinven all tipped to be preparing bids. The majority of these are thought to be offering funding for a management buy-out. Original founder Jon de Mol may also be involved in an offer to buy back the group. 

Telefonica acquired Endemol for €5.5bn in 2000, and last month floated 22 per cent of the group on the Amsterdam stock exchange to help decide whether to opt for a sale or flotation of the rest of its stake.