The five children of the late Muppets creator Jim Henson have bought the building for $12.5m (�7.8m) and are leasing it to The Jim Henson Company.

The man who started it all: Jim Henson

"When we heard that the Chaplin lot was for sale, we had to have it," said Brian Henson, who heads The Jim Henson Company with Charles Rivkin.

"It's the perfect home for the Muppets and our particular brand of classy but eccentric entertainment.

"When people walk onto our lot, they will fall in love with Hollywood all over again."

Listed building

The five-acre Hollywood site, which includes Chaplin's 10,000-square-foot sound stage, was declared an historical monument by the Los Angeles Cultural Heritage Board in 1969, protecting some of its buildings from alteration.

Chaplin and Jackie Coogan in 1921's The Kid

Opened in 1918, Chaplin created many of his best known films at the studios, including The Kid, The Gold Rush, Modern Times and The Great Dictator.

The studios, which were put up for sale last year, have been the home of A&M Records for the past 33 years.

"The buildings are a lovable hodgepodge of quirky, unusual spaces," said Lisa Henson, who works with the film division of her father's company.

"It's not your typical corporate space, but it's ideal for the Muppets."

Jim Henson, who died in 1990 aged 53, left five children - Brian, Lisa, Cheryl, John and Heather.

Apart from the long-running Muppets TV series and films, The Jim Henson Company is behind veteran children's show Sesame Street, sci-fi series TV Farscape and movies such as The Dark Crystal and Labyrinth.