News Corp. presses Telepiu/Stream OK

MILAN — Rupert Murdoch’s legal representatives flew to Brussels Monday to speed up News Corp.’s much-delayed acquisition of Vivendi Universal’s Italo pay TV operator Telepiu by smoothing things over with the European Union antitrust body.

Last week, the EU authority postponed its decision on whether to review the Telepiu acquisition and its merger with News Corp.-backed Stream until Nov. 29. At that time it could simply authorize the Italian antitrust body to probe the deal.

The Italo body authorized a Telepiu-Stream merger in May, slapping limits on the new entity — to be called Sky Italia — which would become the country’s sole pay TV operator.

Murdoch’s new deal has two crucial differences to the May one: News Corp. is acquiring Telepiu instead of selling Stream to Viv U as planned before former topper Jean-Marie Messier was ousted.

A second difference is that Telecom Italia, and current shareholder of Stream, will remain in the new merged entity with a 19.9% stake; in the May deal it was supposed to leave.

Last month, News Corp. clinched the deal to buy Telepiu from Viv U for the knockdown price of S900 million ($887 million) in cash and assumed debt after a year of talks. Telepiu’s original pricetag was $1.48 billion.

Viv U subsid Canal Plus bought Telepiu in 1997 in a bid to create a Europewide network. Telepiu, which has never made a profit, accounted for the lion’s share of Canal Plus’ $358 million loss last year.

Italy, the third-largest economy in continental Europe, has 52 million TV households and only six real broadcast channels. Pay TV penetration is only 9% and there’s no competition from cable.

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