Spain’s Telefonica takes 21% of Prisa’s Digital Plus

Spanish telco giant Telefonica has acquired a 21% stake in media conglom Prisa’s pay TV platform Digital Plus for E470 million ($705 million).

Telco will pay $360 million in cash and the rest will be covered by a previous loan Prisa owed to Telefonica from 2003. The deal values satcaster Digital Plus at $3.5 billion

The agreement gives a real boost to Prisa, which has debt of around $7.5 billion and must make good on a $2.9 billion bridging loan before March.

Telefonica was Digital Plus’ second-biggest shareholder until May 2008, when it sold its 16.8% stake to Prisa.

Prisa and Telefonica will explore ways to co-operate on audiovisual development and other services.

Telefonica prexy Cesar Alierta said the deal would allow Telefonica to merge products and services, giving customers more choice.

For instance, Telefonica would have access to selected Digital Plus TV content to feed its own ADSL TV service Imagenio.

Digital Plus leads Spain’s pay TV market with near 1.9 million subscribers; Imagenio has 654,000.

“The divestment of Digital Plus is one of the moves Prisa is making to ensure the financial stability of the company,” said Prisa CEO Juan Luis Cebrian.

In September, Prisa sold a 35% stake in Portugal’s leading private media company, Media Capital, and 25% of publishing subsid Santillana, raising around $600 million.

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