The French media company has the option to take full control of Amsterdam-based N-Vision, which owns 51 percent of TVN, within four years after closing the transaction, probably in the second half of next year, TVN said today in a regulatory statement in Warsaw.
Canal Plus and TVN are also merging their Polish satellite pay-TV businesses in a joint venture to compete with Cyfrowy Polsat SA (CPS), Poland’s largest pay-television operator by customers. The new merged platform, to be led by TVN Chief Executive Officer Markus Tellenbach, will have 2.5 million viewers and expand TVN’s reach in Poland, the European Union’s largest eastern member.
TVN’s pay-TV “N” platform valuation is “a very positive information,” Dominik Niszcz, an analyst at Raiffeisen Centrobank AG, said by phone from Vienna today. “TVN disposes a company that reported losses and in exchange it gets a venture from which it will have dividends.”
Canal Plus will have 51 percent in the new company, while TVN will hold 32 percent and Polish cable television provider UPC will have 17 percent. TVN’s stake is valued at about 1.9 billion zloty, it said. The merged unit will pay a dividend amounting to 75 percent of net profit.
Fair Market Price
Canal Plus will exercise its options at a fair market value, Chief Executive Officer Bertrand Meheut said at a conference in Warsaw today.
The N-Vision deal won’t trigger the early redemption of TVN bonds or a mandatory tender offer for TVN’s free float of shares, the company said in a separate e-mailed statement. Deutsche Bank was TVN’s financial adviser in the deal.
The yield on TVN’s euro bonds due in 2018 was at a record high of 9.48 percent today, climbing from 7.14 percent on Oct. 28, according to data compiled by Bloomberg.
TVN jumped as much as 7.3 percent, and traded up 5.8 percent at 9.6 zloty, the highest in more than a week, as of 12:19 p.m. in Warsaw, valuing the company at 3.3 billion zloty.
TVN, which will book a non-cash profit of 700 million zloty ($203 million) from the Canal Plus agreement, is the most indebted non-financial company in Warsaw’s benchmark WIG20 Index. Its net debt amounts to 2.9 times its equity, according to data compiled by Bloomberg.
TVN’s N unit holds the rights to show the UEFA soccer Champions League games in Poland through 2015. Canal Plus’s unit has the rights to show the English Premier League, the Spanish Primera Liga, the Italian Seria A and France’s Ligue 1 soccer in Poland in addition to the Polish Ekstraklasa soccer league, speedway and basketball events.
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