Telefonica close to Digital Plus deal

Spanish telecom giant to buy 20% of Prisa satcaster

MADRID -- Spanish telecom giant Telefonica is in advanced talks to buy 20% of media group Prisa's satellite platform Digital Plus.

"The talks are on a good track," Telefonica president Cesar Alierta told reporters at a telecom conference in Seville, Spain on Friday.

The news sent Prisa's stock price up 1.53% to €3.3 ($4.9) Monday morning.

Prisa has been looking to sell the satcaster to help pay off its €5 billion ($7.4 billion) debt and restructure its media business, emphasizing its free-to-air channel Cuatro.

Alierta said Telefonica was acting as a lone buyer, as opposed to earlier this year when they it tried to jointly negotiate a stake in Digital Plus with Vivendi. Indeed, Alierta said Telefonica was not happy with Vivendi's maneuvering of late, referring to the French company's intention to buy Brazilian telephone operator GVT.

"It was a surprise to us," Alierta said. "At this time, we're not very happy with Vivendi."

Spain's business dailies speculated that Telefonica's falling out with Vivendi left the door open for Italian media group Mediaset to pick up a minority stake in Digital Plus. Mediaset has been looking to widen its presence in the Spanish TV landscape, where it already owns the controlling stake in free-to-air channel Telecinco.

Experts estimate Digital Plus is worth some €2.9 billion ($4.29 billion) using comparative values with the rest of the Spanish pay TV sector.
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