The firm that owns social networking site Bebo is thought to be in negotiations to buy catch-up TV service SeeSaw, which was due to close this month.

Arqiva, the firm behind the free online TV catch-up service SeeSaw, which uses technology originally employed for the Project Kangaroo venture, revealed last month that SeeSaw would close this month after failing to find an investor or buyer.

The free service, which was made publicly available in February last year after less than a month of a closed beta trial of 20,000 web users, is similar to music-streaming service Spotify. It offers around 3,000 hours of free content from broadcasters including the BBC, Channel 4 and Five, which comes peppered with 60-second adverts that cannot be skipped. Alternatively, there's a premium service that offers around 1,000 hours of paid-for shows from broadcasters including Comedy Central, BBC Worldwide and MTV.

However, according to The Telegraph, Criterion Capital Partners is currently negotiating the final terms of a deal to acquire SeeSaw.

A source close to the deal who wished to remain anonymous told The Telegraph: “Criterion is close to signing the deal to acquire SeeSaw. It’s a good opportunity for the firm to access the lucrative online TV and film market, which Arqiva has been unable to crack.

“Arqiva is hoping to finalise the deal by June 30 in time for the end of its financial year. The service was meant to shut down yesterday [June 20].”

Arqiva said it “is still in discussion with various parties about a possible sale of SeeSaw”.  However, Criterion Capital Partners, which acquired Bebo for $10m last year, would not comment on the issue.