Swisscom ups stakes in PubliGroupe takeover battle with Tamedia

ZURICH Fri May 16, 2014 2:28pm EDT

ZURICH May 16 (Reuters) - Swisscom upped the stakes in a battle for PubliGroupe on Friday, topping an existing bid for the Swiss advertising firm with a 502 million Swiss franc ($563.19 million) offer.

The Swiss national telecoms provider had already bid 230 million francs for PubliGroupe's shares in two local directory businesses, but expanded that bid for the entirety of the firm in order to clinch control of local.ch, which provides information on phone numbers.

Swisscom's offer trumps by one-third a rival bid for PubliGroupe by Swiss media company Tamedia AG, which last month launched 150-franc-per-share offer valuing the advertising group at around 375 million francs.

"Swisscom's aim is to assume full control of local.ch and to continue developing its strategic directories business in the existing market environment," Swisscom said in a statement.

PubliGroupe said it would evaluate both companies' offers, and asked shareholders to await an official recommendation from its board before tendering shares to either bidder.

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.

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 is already PubliGroupe's largest shareholder with a 17.6 percent stake, after acquiring shares held by U.S.-based fund manager Tweedy Browne as well as other shares this week.

Swisscom said it would not exercise influence in PubliGroupe's minority shareholdings in media companies SNP Societe Neuchateloise de Presse SA, Suedostschweiz Presse und Print, or Rhone-Media SA - all regional Swiss publishing houses - if the deal is concluded, and would dispose of them.

The Bern-based company said it will consider all options for the other shareholdings. The company said it won't stand in the way of the previously announced sale of FPH Freie Presse Holding AG to Aktiengesellschaft fuer die Neue Zuercher Zeitung, which publishes the Swiss daily NZZ. ($1 = 0.8914 Swiss Francs) (Reporting By Katharina Bart, editing by David Evans)

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