French suitor circles European reality giant

MADRID — The European TV industry’s very own soap opera — the sale of Endemol by Spanish telco giant Telefonica — is moving into its final episode.

A new and very classy suitor has emerged: Bernard Arnault, the chairman of French luxury goods group LVMH Moet Hennessy Louis Vuitton, is teaming with Endemol France management to bid for the “Big Brother” producer, according to a Financial Times report Monday.

The joint bid would be backed by PAI, a French buyout company, the FT added.

Endemol stock closed up 2.6% Monday on the back of LVMH interest.

Arnault and Endemol France management face a limited lineup of fellow competitors and at last some sense of urgency as Spanish telco Telefonica divests its 75% stake.

Other reported candidates include the combo of former Endemol founder John de Mol and private equity firm Apax, Silvio Berlusconi’s Mediaset and Italian media group De Agostini that shares a controlling stake in Spanish broadcaster Antena 3.

Mediaset confirmed its interest in Endemol two weeks ago. However, De Agostini has refuted Italian press reports.

Telefonica has tapped Lehman Brothers to advise on the sale, believed to be an invitation-only auction, while Merrill Lynch will act as financial adviser.

The sale could begin as early as this week. Telefonica holds its monthly board meeting on Wednesday, and sources suggest the Endemol sale is on the agenda.

“All the elements for a sale are in place,” a Telefonica spokesman said. “We floated part of Telefonica to establish its market value, and Endemol France has now been reincorporated into Endemol.”

Telefonica also is mulling upping its stake in Brazilian mobile phone operator Vivo and may take minority equity in Telecom Italia. It confirmed in mid-February that it had been contacted by Italy’s Pirelli, which owns an 18% stake in Telecom Italia.

Both investments would require major moolah. An Endemol sale — which could net up to $3.6 billion — will give Telefonica extra purchasing muscle.

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