ProSiebenSat.1 Looking for 'Very Attractive' Sales Price for Scandivanian Unit

Discovery Communications and private equity firms have been looking at the European broadcaster's Nordic unit, which could draw a price of more than $1.7 billion.

Top executives of European broadcast giant ProSiebenSat.1 on Thursday didn't provide new insight about the progress of the auction of its Scandinavian business, which a source said is in its final stages.

But management did reiterate in an earnings conference call that it would only sell the Nordic assets, which include TV networks and radio stations in Denmark, Sweden, Norway and Finland, if it gets a "very, very attractive price" for them.

The company's Scandinavian TV networks, which have attracted interest from TV companies like Discovery Communications and private equity firms, continued to gain market share in the third quarter and helped boost the firm's financials, while its channels in its core German-speaking market posted weaker results.

About a year ago, ProSieben decided to sell assets in the Benelux countries, but retain the Nordic business because bids for the latter were deemed too low. After some unsolicited approaches, the company said though it would evaluate bids.

Recent reports said that Discovery Communications and private equity firms Providence Equity Partners and Nordic Capital were the three final bidders, with each offering more than $1.7 billion (1.3 billion euros). Analysts have estimated the value of the Scandinavian business at as much as $1.9 billion. Dow Jones then reported that the bids were so attractive a sale was likely.

A spokeswoman for Discovery Communications, which has seen strong growth at its international business in recent years, declined to comment. But CEO David Zaslav, who has said he is spending around 40 percent of his time on the international business, on an earnings call earlier this week outlined Discovery's overall approach to acquisitions.

"We only want to buy assets if we think they can help us grow faster," he said. "Our number one target is international. We've grown our international business from 2007, [when] we were making $250 million. This year, we'll make significantly more than $700 million…So, to the extent that we could find assets outside the U.S. that'll help us grow faster, that we can evaluate quickly, that we have real synergy with, that would be our first priority."

But he also emphasized: "We don't want to overpay, and we haven't been able to find those assets yet, but we're hopeful." Some took that as an indirect reference to the ProSieben auction.

The Nordic assets generated $606 million in revenue in 2011 out of a group total of about $3.8 billion.

Jefferies & Co. analyst Will Smith said Thursday that if the timing of ProSieben's auction is similar to that of the Benelux sale, "we would be looking to hear something concrete by January, although it could be earlier since they went through this process last spring."
Analysts have been divided on whether a sale would be good or bad for ProSieben, with many saying it depends on the price and what it ends up doing with the cash. "A sale would raise questions about future growth prospects given a greater reliance on German and Central and Eastern European advertising, both of which are struggling to drive meaningful growth in this environment," Smith said. "Interestingly, the market seems to be giving them a lot of credit for selling the Scandinavian assets."

Twitter: @georgszalai