The companies have 30 days to close the details of the agreement, Prisa, as the Madrid-based group is known, said in a regulatory statement following a board meeting yesterday. The acquisition of Prisa’s 56 percent stake in Television Digital SA, or DTS, means Telefonica will hold 78 percent of the broadcaster. Italy’s Mediaset SpA (MS) owns the remainder via its Spanish division.
Telefonica, Europe’s second-largest phone company by revenue, is betting on movies and sports television programs to bolster its shrinking Spanish phone business. Owning DTS would give Telefonica more flexibility in tailoring offers such as Movistar Fusion TV, a new package of TV, landline, mobile-phone and Internet subscriptions starting at 75 euros a month.
Shareholders of Prisa, which publishes El Pais newspaper, approved an agreement to restructure about 3 billion euros of debt in December, giving the media company time to turn around the business and reduce debt while looking for a buyer for the broadcasting assets. Prisa’s net loss more than doubled last year to 648.7 million euros.
Telefonica had considered options for DTS including teaming up with Mediaset or with Al Jazeera to buy the asset, a person familiar with the matter said in March.
Prisa shares fell 3.6 percent to 39.8 cents at 3:44 p.m. in Madrid, while Telefonica rose 0.2 percent to 11.95 euros.
Telefonica is scheduled to release first-quarter earnings tomorrow. It may report sales of 12.3 billion euros, a decline of 13 percent from a year earlier, according to the average of analysts’ estimates compiled by Bloomberg.
HSBC Holdings Plc, Banco Santander SA, and LionTree Advisors LLC advised Prisa on the pay-TV unit sale.