Fininvest drops Ch. 5 bid

Silvio Berlusconi’s Fininvest has dropped its plans to join the Thames TV bid for Britain’s Channel 5 license, according to highly placed Fininvest sources.

Fininvest execs had negotiated to take a 33% stake in Channel 5 Holdings, the Thames-backed company that is the sole bidder for the license, but Berlusconi himself vetoed the deal last week.

Fininvest then put forward a restructured proposal, but this met with a chilly response from Thames.

The Italian company’s withdrawal leaves Thames as still the only investor in Channel 5, with a 15% stake. However, Thames execs say they are in serious talks with two other potential partners, and the company is also considering upping its own stake.

The Independent Television Commission announced yesterday that it would make a final decision about whether to award the license to Channel 5 on Dec. 17, a month later than expected. No explanation was given for the delay.

Thames’ chances of winning ITC approval would be greater if it managed to line up significant partners by that date, but this is not essential. The ITC may decide to award the license, conditional on Thames raising the finance within 12 weeks.

Fininvest and Thames fell out over the Italian company’s demand for management control over Channel 5’s air-time sales, with added influence over scheduling. “Fundamentally, Thames did not want to give us a free rein in programming and scheduling,” said a Fininvest exec. “Scheduling is intimately connected to ad sales: That’s the whole science of commercial TV, and it’s the core of our know-how.”

According to Italian press reports, Berlusconi is keen to concentrate his resources on expanding his department store empire. He is rumored to be planning a $ 2 billion takeover of the Rinascente chain.

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