UPDATE 2-Broadcaster CME buys Bulgarian bTV from News Corp

Thu Feb 18, 2010 11:45am EST

 * Agrees $400 mln cash purchase
 * Will create new subsidiary to consolidate Bulgarian ops
 * Shares little changed
 (Adds analyst, details on Bulgaria market)
 PRAGUE, Feb 18 (Reuters) - Central European Media
Enterprises (CME) (CETV.O) CETVsp.PR has agreed to buy
Bulgarian television station bTV for $400 million from News
Corporation (NWSA.O), CME said on Thursday.
 The deal will give CME Bulgaria's most watched station, and
add to its holdings of Pro.BG news and entertainment station.
The sale should be finalised in the second quarter, CME said,
and could be adjusted based on working capital targets.
 It said as part of the agreement it would buy Top Tone
Holdings Limited's 20 percent stake in Bulgarian Pro.BG. In
exchange, Top Tone will take a 6 percent ownership stake in a
new CME subsidiary that holds bTV and Pro.BG. [ID:nWNAB8969]
 Shares in CME were little changed after the announcement,
and closed 1 percent down at 527.5 crowns in Prague.
 CME's Nasdaq shares gained 0.2 percent to $28.532. News Corp
shares added 0.1 percent to $13.46.
 Vaclav Kminek, an analyst at Ceska Sporitelna in Prague,
said Bulgaria's TV ad market was worth around $200 million,
while synergies could be made with CME existing assets.
 "We see the news as positive, while we expect the price to
fall in the range EUR 300-400 million, which is appealing
based on our valuation," he said.
 The acquisition follows CME agreeing to sell its Ukrainian
operations for $300 million last month. [ID:nWNAB6045]
 "The acquisition of bTV is the next step in repositioning
CME after the sale of our Ukrainian operations," Chief Executive
Adrian Sarbu said in a statement. "bTV greatly complements our
portfolio of broadcasting assets."
 CME operates in six central and eastern European markets,
with the Czech and Romanian markets its biggest. Its revenue
fell over 30 percent in the third quarter, although a year-long
decline in advertising spending bottomed out.
 It releases full-year results on Feb. 24.
 In 2008, CME earned revenue of $1.3 million, but showed a
$10.2 million EBITDA loss.
 Speculation about the deal had swirled for several months. A
source told Reuters last month that the sale price being
discussed was 500 million euros ($677.8 million).
 (Reporting by Jason Hovet, editing by Mike Peacock and David