Romanian telecom incumbent Romtelecom has agreed to buy local DTH broadcaster Boom TV, operated by insolvent DTH Television Group, for some ?7.32m plus VAT. The price is dependent on Boom TV proving that it has 95,000 subscribers, and will fall by ?80.08…
Romanian telecom incumbent Romtelecom has agreed to buy local DTH broadcaster Boom TV, operated by insolvent DTH Television Group, for some ?7.32m plus VAT. The price is dependent on Boom TV proving that it has 95,000 subscribers, and will fall by ?80.08 per subscriber if numbers are shown to be lower.
DTH Television Group, which is controlled by Cyprus-based Blackdazaar and by Israeli firm Elran Investments, started insolvency proceedings in the middle of last year following mounting losses caused by a sharp decline in subscribers.
In an email to SatelliteFinance, the company confirmed that Romtelecom has made an official offer for the assets and equipments of Boom TV to Casa de Insolventa Transilvania, which handled DTH Television Group’s insolvency case.
“The price to be paid in the end depends on the number of customers actually taken over by Romtelecom. The acquisition is yet subject to approval from the Competition Agency,” the company explained.
This deal could mark the beginning of a wave of consolidation in the Romanian DTH market, currently populated with five platforms: Digi TV (operated by Romania’s number one cable company RCS&RDS); Dolce (Romtelecom); Focus Sat (cableco UPC Romania); Boom TV (DTH Television Group); and Akta (DCS).
Two years ago, Romtelecom was already in talks to acquire Boom TV but the Romanian incumbent reportedly pulled out of the negotiations.
Greek incumbent OTE, which is controlled by Deutsche Telekom, holds 54.01% of Romtelecom, while the Romanian Ministry of Communications and Information Society holds the remaining 45.99%. In December last year, the Romanian Ministry of Communications and Information Society told OTE that it was looking to sell its stake in the company.
Meanwhile, Romtelecom may be looking to enter talks to acquire UPC Romania, the country’s second largest cableco, local media reports wrote. Romtelecom declined to comment on this matter.
In late February, RCS&RDS was also reportedly close to 12 services acquiring UPC Romania for US$300m. Such a deal would create a telecom giant of about 10 million TV, internet, fixed and mobile phone subscribers.
Entrepreneur Zoltan Teszari, who owns 43% of RCS&RDS, was understood to have held talks with Goldman Sachs, Credit Suisse and Morgan Stanley to finance an acquisition of the group.
In early March, the company signed two financing agreements worth a total of US$368m. It raised a US$206m loan with ING, RB International, RBS, Unicredit, BNP Paribas and BRD (Groupe Societe Generale). It also secured a ?125m loan. The two financings are understood to be forward start facilities.
Reports also suggest that UPC Romania’s owner, US cable giant Liberty Global, hired Rothschild last year to review strategic alternatives in the face of strong competition from RCS&RDS. UPC Romania had initially been valued at US$700m, but has seen its subscriber base fall because of growing competition.
RCS&RDS has now reportedly expressed concerns about Romtelecom entering talks for UPC in order to boost the deal’s price and obtain more details about the transaction. But sources were quoted saying that Deutsche Telekom, which controls Romtelecom through OTE, would oppose a deal between the incumbent and UPC.
