The Muppets are going home. After four years under German ownership, Kermit, Miss Piggy and the rest are returning to the bosom of the family of their creator, the late Jim Henson.

Mr Henson's five children have agreed to buy back the Muppets for about $89m (£55m) from EM.TV in Munich which originally paid $690m for the business at the height of the stock market boom.

The difference between the purchase and sale price might suggest that the Henson family was represented by Miss Piggy at her most forceful and EM.TV by the Swedish chef at his most confused.

However, an EM.TV spokesman begged to differ. He argued that in between the purchase and sale EM.TV had sold Henson assets - cable television interests and Sesame Street - worth around $250m, while the original purchase price was based on a cash and shares deal where only $93m was in cash. "At the cash level it was pretty good while for the balance sheet maybe not."

EM.TV had been trying to unload the Muppets for the past 18 month. A one time darling of Frankfurt's Neuer Markt EM.TV struggled to cope with the consequences of its aggressive expansion - which included buying a share of the rights to televise Formula One racing as well as the Muppets - and a corporate scandal which last month saw its founder and former chief executive Thomas Haffa and his brother Florian fined €1.5m (£1.1m) for misleading shareholders.

Even though the Henson company was part of EM.TV's core operation of children's television its profile meant that it formed part of the asset disposal programme. It is understood to have attracted interest from a number of companies including Walt Disney, media investor Haim Saban and a group around investor Dean Valentine.

The EM.TV spokesman said the group would continue to focus on children's television while building up its sports merchandising business. It has secured the European merchandising rights to the World Cup in 2006, which will be staged in Germany.