TI Media in talks with L'Espresso on broadcasting tie-up
MILAN (Reuters) - Italy's Telecom Italia Media has signed a non-binding term sheet with publisher L'Espresso to pave the way for a tie-up of their digital broadcasting activities.
In a statement on Monday the media company said the operation would generate industrial synergies and create a company with five national bandwidth assets, also known as multiplexes, owned by Telecom Italia Media.
The company, controlled by debt-laden phone group Telecom Italia, said its board had decided to continue talks to reach a final agreement.
Two sources familiar with the matter said the newly created broadcasting company, which would sell bandwidth in competition with Mediaset and state broadcaster RAI, could be put up for sale at a later date.
"The rationale of the operation is to put together the assets and extract value from them, probably through the sale of a stake or of the entire entity," one source told Reuters.
The value of each multiplex is between 80 million euros ($100 million) and 200 million euros and could benefit from a recovery of the Italian advertising market, analysts said.
Mediobanca advised Telecom Italia Media and Banca IMI advised L'Espresso.
Shares in Telecom Italia Media closed up 2.5 percent on Monday and L'Espresso was up 4.75 percent, outperforming the broader Milan bourse.
($1 = 0.7368 euros)
(Reporting by Danilo Masoni, editing by Stephen Jewkes and David Evans)