Prisa, Spain’s second biggest media group, has launched a e2 billion ($2.87 billion) bid for a 50% stake in Sogecable, the dominant Spanish pay TV operator.
Thursday’s buyout play comes after Prisa bought up the 2.9% stake in Sogecable held by Eventos, a company owned by Spanish department store chain El Corte Ingles.
Under Spanish law Prisa is now obliged to offer to buy up the rest of the company, which owns satcaster Digital Plus and broadcaster Cuatro. Stock market trading in both company’s shares was suspended in Madrid.
Prisa’s share price offer is e27.98 ($40.16) — 5.6% more than Sogecable’s closing price on Wednesday.
Prisa CEO Juan Luis Cebrian wants to gain full control of Sogecable to expand in TV services. But many sources believe he will spin off Digital Plus to concentrate on terrestrial TV assets — including the hugely profitable Cuatro.
Prisa will “clarify” its strategy for audiovisual services with the bid, and once that’s done, it will decide what to do with the group’s assets, Cebrian told analysts Thursday on a conference call. “Nothing will be done before then,” he said.
Prisa’s bid faces various roadbumps, however.
It would probably be deficit-financed, pushing Prisa debt to $6.46 billion — heavy leveraging for a company that saw profits of just $209.7 million in the first nine months of the year.
Analysts are divided as to whether Sogecable shareholders, led by Spanish telco giant Telefonica with 17%, will want to sell.