UPDATE 2-ProSiebenSat expects two bids for Nordic TV-sources

Thu Nov 29, 2012 10:49am EST

* Discovery Communications, Providence expected to bid-sources

* ProSieben wants 1.3 bln euros for Nordic assets-sources

* Bids may not reach asking price-sources

* Disposal could pave way for sale of rest of German broadcaster

By Simon Meads and Arno Schuetze

LONDON/FRANKFURT Nov 29 (Reuters) - ProSiebenSat.1 is expecting two bids for its Nordic TV channels, valued at more than 1 billion euros ($1.3 billion), five people familiar with the situation said.

The disposal could pave the way for the sale of the rest of the German broadcaster as its private equity owners KKR and Permira carve up the company to make it more attractive to buyers.

Rival TV group Discovery Communications and private equity group Providence Equity Partners are expected to table bids for ProSieben's Scandinavian assets, which include Sweden's Kanal 9, Norway's TV Norge and Kanal 4 in Denmark, the sources said.

Bids are due on Friday and ProSieben is seeking about 1.3 billion euros for the business, the sources added.

Private equity house Nordic Capital is keen on the business but one source said that a final bid is by no means certain after its bidding partner, Swedish media group Bonnier, pulled out.

KKR and Permira bought ProSieben in 2007 for 6.8 billion euros, one of the largest buyouts in Europe. But they are now breaking it up to make it more digestible for prospective buyers who are finding banks unwilling to lend as freely as they did before the financial crisis.

The rest of ProSieben would be focused on Germany, which potential buyers would find more attractive than a pan-European group.

Shares in ProSieben were up 0.6 percent at 22.5 euros at 1432 GMT, giving it a market capitalisation of more than 2.4 billion euros.

KKR and Permira own 88 percent of the voting shares, with Dutch publisher Telegraaf Media Group holding the remaining 12 percent.

ProSieben sold its Belgium and Netherlands TV and print operations last year for 1.2 billion euros - more than 10 times their earnings before interest, tax, depreciation and amortisation. The asking price for the Nordic business would equate to a similar earnings multiple.

However, the business may struggle to achieve that value and Providence may yet decide not to bid, some of the sources said.

The price expectation for the Nordic business puts it on a higher multiple than ProSieben itself, which trades at 4.5 times earnings, and Europe's largest broadcaster RTL Group, on 8.1 times earnings.

Possible bidders are worried about the company's ability to increase its market share and the prospect of falling retranmission fees - the fees that cable operators pay to broadcasters to carry their programmes, the sources said.

ProSieben's private equity backers will push to pay themselves a special dividend if they do complete a sale, while the company's management wants some of the proceeds to be reinvested in the business, another source said.

Discovery, ProSieben, KKR, Permira, Providence and Nordic Capital all declined to comment.

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