Schibsted Climbs on Telenor Asia, South American JVs: Oslo Mover
Schibsted ASA (SCH), Norway’s biggest media group, rose the most in three weeks in Oslo after agreeing to an expansion of operations in South America and Asia with Telenor ASA (TEL), the Nordic region’s biggest phone company.
Shares in Schibsted climbed as much as 1.6 percent, the most since Sept. 10, and traded 1.2 percent higher at 309 kroner as of 11:10 a.m. in the Norwegian capital. That makes Schibsted the biggest of four gainers on the Oslo stock exchange’s OBX index of 25 most-traded stocks, which was down 0.7 percent.
Schibsted, which traces its roots back to 1839, is expanding its online business as readers increasingly forgo traditional print media. The Oslo-based company today said it’s established two ventures with Telenor aimed at expanding into the high-growth emerging markets of Asia and South America.
“The announced strategic partnerships considerably improve Schibsted’s chances of obtaining leading positions in key markets,” Danske Bank A/S said in a note to clients today. “We upgrade to buy with a new 12-month target price of 400 kroner.”
Schibsted and Telenor have set up SnT Classifieds, which will pursue online classified opportunities in selected key markets in South America and Asia, the media group said in a statement today. “Telenor will also join as equal partner in 701 Search, the current joint venture between Schibsted Media Group and Singapore Press Holdings which operates and develops online classifieds in Southeast Asia.”
Telenor will pay about 145 million euros ($196 million) in cash for 50 percent of SnT Classifieds and 33.3 percent of 701, Schibsted said. The parties have committed pro-rata funding for the joint ventures until the businesses reach cash flow breakeven, the media group said, without giving more details.
Schibsted, which owns Aftenposten, Norway’s largest newspaper, and Swedish tabloid Aftonbladet, is investing to boost growth and plans to spend 500 million kroner ($83.1 million) to increase revenue as it seeks to replicate the success of its Finn.no, Blocket.se and Leboncoin.fr websites in nations including Malaysia and Brazil.
Telenor fell as much as 1.9 percent, the most in more than a month, and traded 1.4 percent lower as of 11:10 a.m. in Oslo.
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