Berlusconi’s Mediaset Soars as Pay-TV Separation Outlined

Mediaset SpA (MS) rose the most in five months after the media group owned by former Italian Prime Minister Silvio Berlusconi said it’s considering a separation of pay-television operations for possible sale.

Mediaset jumped as much as 8.78 percent, the biggest intraday gain since July 15, and was trading up 8.1 percent at 3.14 euros as of 10:27 a.m. in Milan. The stock has doubled this year, valuing the company 3.71 billion euros ($5.1 billion).

Mediaset, which owns TV networks in Italy and Spain and news websites, reported its first-ever annual loss in 2012 because of a shrinking Italian advertising market and impairment charges. The Milan-based company sold its 33 percent stake last year in Endemol NV, creator of the Big Brother TV franchise, saying the Dutch production company was no longer a strategic fit. Mediaset earlier this year tried unsuccessfully to sell a cinema chain it co-owns with the Benetton family.

The media operator and its Spanish affiliate will look into combining pay-TV activities into a single, standalone company and assess the unit’s potential for expansion abroad and possible “involvement” of industrial or financial partners, Mediaset said yesterday in a statement.

Such a move would offer a “material upside,” analysts at Deutsche Bank AG said in a report today, adding that Mediaset’s statement appears to be about “preparing the asset for sale.”

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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