The board of Spanish media conglomerate Prisa has approved Telefonica’s €725m (US$1bn) offer for satellite broadcaster Distribuidora de Television Digital, better known as Canal+, which it tabled earlier this week.
Telefonica is looking to add…
The board of Spanish media conglomerate Prisa has approved Telefonica’s €725m (US$1bn) offer for satellite broadcaster Distribuidora de Television Digital, better known as Canal+, which it tabled earlier this week.
Telefonica is looking to add Prisa’s 56% stake to the 22% of the pay-TV operator it already owns. The remaining 22% is held by Silvio Berlusconi’s Mediaset.
In a regulatory filing, Prisa said that it intends to close the deal within 30 calendar days. The sale will allow Prisa to further chip into its €3bn (US$4.2bn) debt pile – well above its market capitalisation of €580m (US$808m).
The transaction will require regulatory approval and Spain’s number three mobile operator Orange has already complained about the deal.
The telco, a subsidiary of the French telecoms giant, is reported to have urged antitrust and telecoms regulator CNMC to veto the takeover, or impose significant remedies. Orange claims that the deal would give Telefonica an 80% market share of pay-TV content in Spain.
The acquisition would bolster Telefonica’s quad play offering in the highly-competitive Spanish market. Rival operator Vodafone has been boosted by the purchase of cableco Ono for €7.2bn (US$10bn), which will give it a fibre optic network that covers 13 of Spain’s 17 regions, passing 7.2 million homes. Meanwhile, Orange is reported to be weighing a bid for fixed-line operator Jazztel.
Prisa’s acceptance of the offer marks a notable step down by the company. At the start of the year, it had been seeking around €1bn (US$1.4bn) for its shares in Canal+, only for no parties to meet that valuation by a 31 January deadline for binding offers.
By March, it was reported that Prisa had dropped its price to around €800m (US$1.1bn). Al Jazeera, Canal+ France, Liberty Global and News Corp were all linked as potential bidders but no offers were forthcoming.
One likely reason for this was due to Prisa’s main shareholder reducing its stake in the conglomerate below 30% in late February.
This triggered a purchase option that allowed Telefonica or Mediaset to acquire Prisa’s stake in the DTH broadcaster for an undisclosed fixed amount.
However, both declined to exercise the option, with Telefonica saying at the time that it preferred to pursue a takeover outside of that arrangement.
The company has not disclosed how it intends to finance its €725m offer for Canal+.
