Mediaset Mulling New Channels, Extra Payout After Unit Sale

  • Company weighing investment options after disposing Premium
  • Expansion in Germany, France and U.K. considered, CEO says

Mediaset SpA is considering starting free-to-air television channels in France, Germany and the U.K. as it reviews investment options after agreeing to sell its Premium pay-TV business.

The company may purchase spectrum to expand its TV business beyond Italy and Spain, Chief Executive Officer Pier Silvio Berlusconi told reporters in Milan late Monday, without elaborating. Another potential option for Mediaset is to pay an extra dividend for 2016, though “it is really too early to say that,” he said.

Shares of Mediaset, Italy’s biggest commercial TV broadcaster, rose as much as 2.7 percent and were up 0.2 percent at 3.06 euros as of 12:14 p.m. in Milan, giving the company a market value of 3.6 billion euros ($4 billion).

Mediaset, controlled by former Italian Prime Minister Silvio Berlusconi, is at a crossroads as it contends with increased competition from the likes of Netflix Inc., which offers a global online video service. An expansion beyond Italy would reduce Mediaset’s reliance on a market where ad spending has sputtered, though showed signs of recovery in the first months of this year.

Mediaset’s intentions to add channels in the U.K. were tempered by the country’s June 23 referendum backing an exit from the European Union, CEO Berlusconi said.

The company agreed to sell its pay-TV unit to Vivendi SA in April because competition from Sky Plc and Netflix is hurting subscriber growth. The transaction “is going well” and the timing of its completion depends on Italian competition authorities, Berlusconi said. Premium’s first-half figures for sales, subscribers and average revenue per user are in line with the company’s forecasts, he said.

Advertising sales for Mediaset as a whole rose about 4 percent in the first half, Berlusconi said. He said it’s too early to give a forecast for the full year because of uncertainty created by Britain’s planned EU exit and terrorism. In May, Mediaset reported sales trailing analysts’ estimates.

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