Discovery and Providence Lowballing on ProSiebenSat.1's SBS Broadcasting Sale (Report)
The European economic slowdown is pulling down the asking price for the company's Scandinavia assets.
COLOGNE, Germany -- Discovery Communications and private equity group Providence Equity Partners are planning to lowball European broadcaster ProSiebenSat.1 in its auction of its SBS Broadcasting Scandinavia television assets, according to an article in The Financial Times.
Discovery and Providence are believed to be the only two bidders left in the auction for ProSiebenSat.1's SBS Nordic assets, which include Sweden’s Kanal 9 and Kanal 5, Norway’s TV Norge and Kanal 5 and Kanal 4 in Denmark, among others.
According to the report, which cites people familiar with the process, second round offers from Discovery and Providence for the Nordic operations will come in at between $1.5 billion - $1.7 billion (€1.2 billion - €1.3 billion), compared to the $1.81 billion (€1.4 billion) ProSiebenSat.1 had been targeting.
The ongoing slowdown in the European economy makes the Nordic networks a more risky proposition, although Scandinavia has outperformed for ProSiebenSat.1 so far this year. The group's international broadcasting revenues, which are almost entirely made up of SBS, increased 8.8 percent to $174 million (€134.1 million) in the third quarter of this year and are 7.1 percent up on the year so far, with revenues of $560 million (€431.8 million).
Providence and Discovery both declined comment.
For his part, ProSiebenSat.1 management recently reiterated that it would only sell its Nordic assets if it gets a "very, very attractive price" for them.
The auction of the company's Scandinavian assets follows the successful sale of ProSiebenSat.1's broadcasting operations in Belgium and the Netherlands last year, which raised around $1.6 billion (1.225 billion).
Georg Szalai contributed to this report.