Cyfrowy Gains on Agreement to Buy Polskie Media: Warsaw Mover

Cyfrowy Polsat SA climbed to the highest in a week after Poland’s largest television network agreed to buy Polskie Media SA for 99 million zloty ($30.3 million) from Polish billionaire Zygmunt Solorz-Zak.

The shares surged as much as 6.5 percent and closed 4.3 percent up at 17 zloty, valuing the company at 5.9 billion zloty. Warsaw’s benchmark WIG20 Index slid 0.6 percent.

Cyfrowy Polsat agreed to buy all of Polskie Media, the operator of TV4 and TV6 channels, which both had 2.9 percent of the Polish TV audience last year, from Solorz-Zak’s Karswell Ltd. and Senior Overseas Ltd. holdings. Separately, the Warsaw-based company agreed to sell RSTV S.A,. its broadcasting infrastructure unit, to Emitel Sp. z o.o. for 45 million zloty. Polskie Media had a net loss of 4 million zloty last year on sales of 76 million zloty, according to Cyfrowy.

“We want to focus on the retail segment and television production,” Chief Executive Officer Dominik Libicki said at press conference. “The transaction allows for significant synergies and for an increase of market share in segments where we may use our content more efficiently.”

Cyfrowy Polsat bought Telewizja Polsat SA, also controlled by Solorz-Zak, for 3.75 billion zloty in 2011. Debt taken to finance the deal is still “a concern” for the network and “its prepayment need to be considered” while deciding on dividend in late April, Libicki said. He said the company doesn’t plan any other “significant investments.”

Dividend Payment

“The acquisition allows Cyfrowy to increase share in a difficult market, and gives chances for better monetization of its content” Przemyslaw Sawala-Uryasz, a Warsaw-based analyst at UniCredit CAIB, said by phone. “Signals that no further investments are in the pipeline makes a dividend more probable. I would expect payout from 0.3 to 0.5 zloty per share.”

The company last paid a dividend in 2010, according to data compiled by Bloomberg. Cyfrowy Polsat plans to refinance its euro denominated bonds maturing in 2018 “not before July 2014”, Libicki said. He said the company may get higher credit ratings than the present Ba2 by Moody’s Investors Service and BB by Standard & Poor’s before that time.

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