UPDATE 2-Swisscom enters fray for PubliGroupe web directories

Fri Apr 25, 2014 6:59am EDT

* Swisscom wants full ownership of online directories

* Follows Tamedia's offer for all of PubliGroupe last week

* PubliGroupe shares rise over 10 pct to 5-1/2 year high

* Tamedia declines to say whether it will raise its bid (Adds Tamedia comment, updates shares)

By Caroline Copley

ZURICH, April 25 (Reuters) - Telecoms group Swisscom said it had submitted a non-binding offer worth 230 million Swiss francs ($261 million) to buy PubliGroupe's shares in two local directory businesses, creating the potential for a takeover battle.

The bid from Switzerland's national telecoms provider comes on the heels of last week's public tender offer for all shares in PubliGroupe from Swiss media company Tamedia AG. The offer of 150 Swiss francs per share values the advertising group at around 375 million francs.

Swisscom's offer, which excludes planned dividend payments, is not for the group but for shares in LTV Yellow Pages Ltd and Swisscom Directories Ltd that it does not already own. Its aim is to gain full control of website local.ch, which provides information on phone numbers.

Shares in PubliGroupe jumped over 10 percent to 175.70 francs, their highest since the end of September 2008. The stock, which had already risen 25 percent since Tamedia announced its takeover offer on April 17, was up 9.7 percent at 174.0 francs by 1040 GMT.

At the heart of both bids is a battle for control of PubliGroupe's online directory platforms, which stand to benefit as the market for digital advertising grows.

"With this takeover offer for local.ch (..) Swisscom is getting in Tamedia's way," Notenstein analysts wrote in a note.

"For, like Swisscom, Tamedia's public offer on April 17 zeroes in on local.ch, the core of PubliGroupe, in order to strengthen its own directory business."

The telecoms operator owns 51 percent of Swisscom Directories, of which local.ch is a subsidiary, and 49 percent of LTV Yellow Pages Ltd, with the remaining share holdings belonging to PubliGroupe.

The three companies, which operate under the brand local.ch, generated a combined revenue of 200 million francs last year.

Tamedia shares were flat at 114.0 francs, while Swisscom dipped 0.1 percent to 524.0 francs.

A spokesman for Tamedia declined to say whether the media group would raise its bid following Swisscom's offer.

"We will include Swisscom's bid in our considerations and publish our offer prospectus by the end of May at the latest," the spokesman said.

WHITE KNIGHT

Analysts at ZKB said Swisscom had emerged as a "possible white knight" to defend PubliGroupe against Tamedia's unfriendly bid.

They said Swisscom's offer represented a premium of 76 million francs over what they consider fair value for the directories businesses.

PubliGroupe recently restructured its business, selling its loss-making media sales business Publicitas to Germany's Aurelius earlier this month.

The company said at the time its sales from digital products, which include local.ch and marketing network Zanox, would make up around 80 percent of its revenue.

In a separate statement, PubliGroupe said its board would carefully consider Swisscom's offer along with last week's tender bid from Tamedia.

A deal would require the approval of PubliGroupe's shareholders and the Competition Commission, Swisscom said.

Media companies are looking to new revenue streams as sales of traditional newspapers dwindle.

Tamedia, which publishes the national daily TagesAnzeiger, said it was looking to strengthen its position in the directories business by gaining access to local.ch.

It already owns a 75 percent stake in search.ch, the leading directory and information platform in the Swiss market. Tamedia said the two platforms serve 4.8 million users per month. ($1 = 0.8824 Swiss Francs) (Additional reportng by Ruppert Pretterklieber; Editing by Jane Baird and Sophie Walker)

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