Telefonica selling its 75% stake in Endemol


AMSTERDAM -- Spanish telecom giant Telefonica on Friday said it wants to sell its stake in "Big Brother" producer Endemol and has retained Lehman Brothers as its financial advisor and asked Merrill Lynch to offer finance facilities to the purchaser.

Telefonica said that, if it is to sell its 75% stake in the Dutch entertainment company, it will expect the buyer to make a public offer for the remaining 25% of the shares. A bid for all of Endemol's share capital could reach about £2 billion ($3.8 billion), analysts believe.

Telefonica bought Endemol for $5.3 billion in March 2000 at the height of the technology bubble, under then-chairman Juan Villalonga. Shortly after taking the helm at Telefonica in 2002, current chairman Cesar Alierta said the TV production house was not a core asset of the company and that he was open to offers, though in no hurry sell.

Earlier this week, the company had "no comment" on whether the drop in Endemol's stock price, along with the slide in worldwide markets, would affect its plan to sell the asset.

Spanish television channel Telecinco said Thursday that it will meet Italian parent company Mediaset next week to discuss a potential joint bid for Endemol. Previously, Mediaset said it was interested in teaming up with Endemol co-founder John de Mol for a possible bid.

Additionally, the Financial Times reported last week that Bernard Arnault, chairman and chief executive of LVMH, was preparing a bid for Endemol with Endemol's French management.

According to the Times, it is possible that ITV may consider entering the bidding, though executive chairman Michael Grade refused to comment on whether the company will make a bid. RTL also was mooted as a buyer but said it is concentrating on turning around its Five channel in the U.K.

Pamela Rolfe in Madrid contributed to this report.