Telecinco Raises Capital for Stake in Digital Plus
MADRID – Spain's largest broadcaster Telecinco announced Thursday it will raise 499 million euros ($678 million) to finance the purchase of a stake in pay-TV company Digital Plus.
Telecinco will offer investors five new shares for every 14 owned at 5.75 euros each, the Madrid-based broadcaster said in a regulatory filing. Parent company Mediaset will buy its proportional shares.
In a landmark deal signed last December -- but that was green listed by competition authorities earlier this month -- Telecinco will buy 22% of Digital Plus from media empire Prisa, as well as free-to-air channel Cuatro. To pay for Cuatro, Telecinco will give Prisa new shares mounting to an 18% stake in the company. The details of the second capital increase have yet to be disclosed.
Telecinco and Cuatro combined represent some 25.2% of the Spanish audience.
Prisa had been looking to sell its satcaster to pay off its 5 billion euro debt and restructure its media business. Last November it sold a 21% stake in Digital Plus to Spanish telecom Telefonica for some $707.5 million.
"Prisa needs the money," said one analyst. "But it's more than just that. The bottom line is that they are all looking to help their advertising dollars by going to advertisers with a broader offer of audience share."
The capital increase comes after Telecinco announced a surprise 48.3% fall in nine-month net profit to 32.16 million euros ($44.41 million) due to its stake in struggling Endemol, maker of TV show Big Brother.