Prisa Chairman Plans to Keep Stake in Mediaset Until Stock Price Rebounds
Promotora de Informaciones SA, the publisher of Spain’s El Pais newspaper, will hold back from selling its stake in Mediaset Espana Comunicacion SA (TL5) until the stock price rises after halving in value in a year, Chairman Ignacio de Polanco said.
Prisa will wait to sell assets including a 17.3 percent stake in Mediaset Espana until it can generate more gains to cut a “big” pile of debt, de Polanco said in an interview in Madrid. Prisa’s holding in Spain’s biggest commercial TV station plummeted 51 percent in value to about 311 million euros ($409 million) in the 12 months before today.
“At a certain time the possibility of selling those assets should be considered,” de Polanco said. “We have to wait until the situation is a bit better everywhere. But yes, it’s something that’s planned.”
Media companies in Spain are struggling to halt a slide in earnings and their stocks as advertising revenue slumps with the country’s worst economic crisis in decades. In December, Madrid- based Prisa agreed with lenders to refinance about 2.9 billion euros in debt, winning time to prepare for a sale of assets. Mediaset Espana, controlled by Italy’s Mediaset SpA (MS), has cut dividend payments and approved a 20 percent pay cut for board members.
Prisa Chief Executive Officer Juan Luis Cebrian said in June the company may sell non-strategic assets valued at more than 500 million euros and issue non-banking debt instruments to extend obligations with lenders.
“It’s fair enough that he wants to keep the stake until things recover a bit,” said Peter Braendle, who helps manage about $60 billion at Zurich-based Swisscanto Asset Management AG including Prisa shares. “But he will need quite a lot of patience and it’s going to be challenging to get to previous levels.”
Mediaset Espana climbed 0.6 percent to 4.44 euros on the Madrid exchange as of 10:27 a.m. Prisa rose 0.7 percent to 68.5 cents, valuing Spain’s largest media company at 730 million euros.
Last week, Prisa reported a net loss of 451.2 million euros in 2011, widening from 72.9 million euros a year earlier on provisions for investments in Portugal and tax risks.
“Business lines continue to be positive,” de Polanco said in the interview yesterday. “It’s not what it used to be because things are harder as advertising remains tough.”
The Spanish advertising market may decline 2.1 percent this year, dropping for the fourth year in five, according to media researcher Zenith Media.
State-owned La1 led Spanish television ratings in February with a 14.1 percent audience share, according to Barlovento Comunicacion, a Madrid-based media consulting firm. Mediaset Espana’s Telecinco channel had 13.7 percent and Antena 3 de Television SA’s Antena 3 channel had 12.2 percent.
To contact the reporter on this story: Manuel Baigorri in Madrid at firstname.lastname@example.org