Cyfrowy IPO may be boon for Polish pay TV

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The IPO of leading Polish pay TV group Cyfrowy Polsat provides a glimmer of hope amid the forest of bearish fiscal results and pessimistic forecasts dominating the international media industry.

Set for May 6, the float of 28% of Cyfrowy Polsat shares could raise up to 1 billion Polish Zlotys, or $480 million, making it the biggest IPO in Polish history. More importantly, if it goes well, the float will send a positive signal to shell-shocked institutional investors.

Cyfrowy twice put off its IPO, citing global market turbulence, but CEO Dominik Libicki said now is the "optimal moment" to float and capitalize on Poland's fast-growing TV market.

Poland's TV market has largely proved resilient to the global economic downturn, with TV ad spending jumping more than 17% to $1.6 billion last year and forecasts predicting continued double-digit growth.

Pay TV subscribers have expanded at a similar clip. Polsat added more than 1 million subscribers last year, bringing its total to 2.2 million, by targeting the low-end market in small cities and towns. Polsat's basic pay package costs just 9 Zlotys ($4.60) a month, about half the entry point for its Polish competitors, Vivendi-controlled Cyfra + and ITI Group's "N."

"Compared to offerings from the two other Polish satellite platforms, Cyfrowy Polsat's starting package looks very attractive (for low-end buyers)," said Andrew Katolo, Central and Eastern European media analyst at Screen Digest.

The open question is whether the float will further spur interest in the Polish market. Billionaire Zygmunt Solorz-Zak, who still will hold a 65% stake in Cyfrowy after the float, in the past has flirted with international media conglomerates. Many believe that the IPO could open the door for a further international invasion of the Polish media scene.

"Our print media is already 70% controlled by international companies, mainly German," said Michal Maliszewski of the Polish Institute in Leipzig, Germany, and an expert on the Polish media industry. "It seems inevitable that television will follow suit. It looks as if this float will speed up that process."

Scott Roxborough reported from Cologne, Germany; Mimi Turner reported from London.
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