Turkish Calik in talks as media law changes
EmptyTurkey's Calik Holding is talking to foreign media companies about selling part of newly acquired ATV-Sabah, sources familiar with the situation said, as Ankara plans raising a foreign-ownership limit in the sector.
Calik Holding bought second largest media firm ATV-Sabah for $1.1 billion in a state-run tender last month after foreign players pulled out, leaving it as the sole bidder.
Bankers and analysts attributed the lack of foreign bids to a law which limits foreign ownership of broadcasters to 25%.
Now Ankara plans to raise the limit to 50%, according to a draft seen by Reuters, which was prepared by the media watchdog RTU.K. and presented to the prime minister's office.
Sources familiar with the situation said Calik, an energy-to-construction group with ties to the ruling AK Party, is in talks with foreign firms with a view to a stake sale.
"They are talking to people ... to all the strategics in Europe," one source, who declined to be named, told Reuters.
Calik Holding declined to comment.
"It will all depend on the 25-percent limit being changed to 50%," said another source, who also declined to be named.
Europe's biggest commercial broadcaster RTL Group was among those to pull out of the sale process last year after showing interest in ATV-Sabah, which comprises assets seized from businessman Turgay Ciner after irregularities emerged.
An official for the TMSF state body selling ATV-Sabah said last September that News Corp, ProSiebenSat.1, Prague-listed CME and Greek Antenna TV had also bought the necessary documents to join the auction.
Reforming the ownership law could be controversial so soon after Calik won the tender. Calik Holding's general manager is Prime Minister Tayyip Erdogan's son-in-law.
"It (raises) a big question about the independence of the Turkish media watchdog. It's a custom-made law for a deal carried out weeks ago," an Istanbul media analyst said.
Some analysts noted that a reform of ownership limits should have been expected: the AK Party, which has a pro-markets, pro-foreign investment philosophy, tried to lift the restriction in 2005 but was blocked by then-president Ahmet Necdet Sezer.
Now former AK Party member Abdullah Gul is president and has tended to approve legislation from the AK-dominated parliament.
RTU.K. declined to comment on the timing of the reform and the ATV-Sabah sale. But an official said the reform would bring Turkey more in line with EU standards and would fill a hole in legislation left when the 2005 law was blocked.
Under the tender conditions, Calik can only sell 25% in the first year, but bankers note that a deal could be structured to include an option to buy more later.
While the reform could be controversial, media analysts say allowing more foreign capital into the sector is positive.
"I view positively any foreign capital coming into the sector because it will create a more rational, profit-oriented market," said Osman Memisoglu, analyst at Finans Invest.
Reform could also open the way for bigger partnerships at market leader Dogan Yayin Holding, which has already sold minority stakes in its businesses to Axel Springer and Deutsche Bank.
It would also benefit unlisted Cukurova, which wants to sell a stake in Turkey's third media business, according to sources familiar with its plans.