Telecom Italia's Sale of TV Assets Draws Five Bidders

7:32 AM PST 09/25/2012 by Eric J. Lyman

Telecom Italia Media controls La 7, the smallest of Italy's seven national television networks, MTV-Italia, plus broadcast infrastructure and frequencies.

ROME – The Italian media reported Tuesday that at least five companies had submitted bids to acquire its television broadcast subsidiary Telecom Italia Media by its end-of-business deadline Monday.

Telecom Italia Media said it was still evaluating the process and would not comment on the topic.

Telecom Italia Media owns La 7, the smallest of Italy’s seven national television networks, plus MTV-Italia and some broadcast infrastructure and frequency bandwidth. The company is publically traded but Telecom Italia, Italy’s former state telephone monopoly, owns 78 percent of the shares and is looking to sell them in order to pay down debt and focus on its core telephony business.

The companies to have submitted bids are Clessidra, an Italian private equity group headed by former Fininvest CEO Claudio Sposito and advised by former Endemol official Marco Bessetti, which reportedly agreed to pay Telecom Italia €300 million ($390 million) and to assume €150 million ($195 million) in debt for all of Telecom Italia’s shares; investment organization Proto reportedly offered €150 million ($195 million) for only La 7 and MTV-Italia; plus mobile phone operator 3-Italia, which is controlled by Hong Kong-based billionaire Li Ka-shing’s Hutchison Whampoa; Cairo Communications, the Telecom Italia and Telecom Italia Media ad buyer controlled by Urbano Cairo, a former associate of Italian billionaire media mogul and former Prime Minister Silvio Berlusconi; and The Discovery Channel.

The bids for the last three companies were not reported, nor was it reported if they were bidding on the entire company or just part. Going into the bidding the Italian media speculated that 3-Italia could be most interested in Telecom Italia Media’s broadcast infrastructure and frequencies, while The Discovery Channel would be most interested in the two television networks.

Based on its latest share price, Telecom Italia Media is estimated to be worth around €275 million ($358 million), with around €200 million ($260 million) in debt.

The surprise bidder was Proto, but given its relatively low offer for only part of the company, that bid is being seen as a long shot.

Berlusconi’s Mediaset and Sky-Italia, the Italian subsidiary for Rupert Murdoch’s News Corp., did not submit bids. Both companies had been linked to possible bids in the weeks heading up to the deadline but said last week they were not interested.

But even without Berlusconi in the bidding, he has ties among the bidders: Cairo is the former head of Publitalia, the media buying company Berlusconi owns, while Sposito headed the Berlusconi family's holding company Fininvest, whose assets included Mediaset and film production company and distributor Medusa. 

All the bids submitted in this round are non-binding. The next step is for Telecom Italia to evaluate the bids, to produce a short list and to set a deadline for closed-envelope binding offers.

With La 7, Telecom Italia is the only company operating a national network in Italy besides Mediaset and state broadcaster RAI, which run three such networks each.

 

 

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