Prisa looks ahead to profit growth

Liberty merger could drive profit threefold this year

MADRID -- Days after Spanish media group Prisa announced a $898.3 million merger with U.S. investment company Liberty Acquisition Holdings, the newly invigorated conglomerate told Spanish and U.S stock authorities it expects to triple its profit in 2010.

In a letter to stock authorities, the publicly traded Prisa group -- owner of Spain's dominate satcaster Digital Plus -- said it anticipates netting €152 million to €190 million ($206 million to $257 million) this year, compared to last year's €50.4 million ($68 million).

The company highlighted its international growth potential in digital markets, as well as the radio and television sectors in Latin America and the United States.

The company credits the merger, which will take the form of a share swap between Prisa and Liberty, and divestments the Spanish company has made in the past few months to pay down its debt.

Prisa borrowed $2.4 billion in December 2007 to up its controlling stake in its film and TV branch Sogecable to 100%. In November 2009, it sold a 20% stake in Digital Plus to Spanish telecom Telefonica and then a further 22% stake in Digital Plus a month later to Spanish broadcaster Telecinco. Prisa also sold a majority stake in its terrestrial channel, Cuatro to Telecinco in December.

Even so, Prisa closed 2009 some $5.4 billion in debt, but Prisa said Monday the Liberty deal, with its cash infusion, would push its debt down to some €3.3 million ($4.5 billion).

The deal, which is expected to close in June, sees the Polanco family maintain its control of Prisa through limiting voting rights of other shareholders.

Prisa has seen its shares grow 223% on the Spanish stock exchange in the past 12 months and will list on the New York Stock Exchange through American depositary receipts.
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