UPDATE 2-News Corp sells stake in Polish broadcaster Puls

Mon Nov 3, 2008 11:54am EST

(Adds Puls TV CEO quotes)

WARSAW Nov 3 (Reuters) - News Corp NWSa.N agreed on Monday to sell its indirect 35 percent stake in small Polish television broadcaster Puls TV to the remaining shareholders for an undisclosed sum.

Rupert Murdoch's media group had hoped to establish a foothold on the quickly expanding Polish market.

But Puls, which now controls less than 1 percent of the market, has failed to gain ground on the established public television and private broadcasters TVN TVNN.WA and Polsat.

The remaining holdings in Puls TV are owned by the Franciscan religious order and DARIUSZ Dabski, who replaced a News Corp appointed head earlier this year. The order will now own a 51 percent stake, with Dabski getting the rest.

"On the part of News Corp, it's probably a reflection on the market situation, which changed radically of late," Dabski told Reuters.

Puls plans to start discussions with potential investors, both local and foreign, within 2-3 weeks.

"I think it will be possible to offer them cooperation, not necessarily linked with a takeover of a controlling stake," he said.

News Corp had hired Lehman Brothers in July to explore the options for its East European television holdings, which also include stations in Latvia, Serbia and Bulgaria.

News Corp had also been in talks with JCDecaux (JCDX.PA) about its Russian outdoor business. (Reporting by Adrian Krajewski and Chris Borowski; Editing by Erica Billingham)