Telefonica has made an offer of up to €355m (US$481m) to Italian group Mediaset to acquire its 22% stake in Distribuidora de Television Digital, better known as Canal+, and take full ownership of the Spanish DTH broadcaster.
The Spanish incumbent…
Telefonica has made an offer of up to €355m (US$481m) to Italian group Mediaset to acquire its 22% stake in Distribuidora de Television Digital, better known as Canal+, and take full ownership of the Spanish DTH broadcaster.
The Spanish incumbent already owns 22% of Canal+ and has an agreement with media conglomerate Prisa to acquire its 56% stake for €750m (US$1.02bn).
Telefonica is offering to pay €295m for Mediaset’s share capital in Canal+. Should the deal with Prisa close Mediaset would receive another €10m, and it could be entitled to €20m in performance-related bonuses spread over the next four years, depending on what Telefonica’s pay-TV unit achieves.
If Mediaset accepts Telefonica’s offer it would be waiving a preferential right to acquire Prisa’s stake in DTS, for which Telefonica will pay a further €30m as compensation, according to a stock exchange filing.
All told the deal could be worth as much as €355m to Mediaset and, if accepted, would mean Telefonica had paid a total of €1.1bn (US$1.49bn) to consolidate the pay-TV operator. Mediaset, controlled by former Italian prime minister Silvio Berlusconi, holds its stake in Canal+ through its local subsidiary Mediaset Espana Comunicacion.
Telefonica’s deal with Prisa is subject to approval from Prisa’s creditor banks and the competition authorities.
Spain’s number three mobile operator, Orange, has already protested about the tie-up. The French telco said the deal would give Telefonica an 80% market share of pay-TV content in Spain and has urged antitrust and telecoms regulator CNMC to veto the takeover, or impose significant remedies.
Canal+ has 1.6 million subscribers and generated €1.16bn in total revenues for 2013, and €28m EBITDA.
