Mediaset jumps in early trading on report of pay-TV sale
MILAN May 22 (Reuters) - Shares in Italian broadcasting group Mediaset rose as much as 3.7 percent in early trading on the back of speculation it could soon sell its pay-TV business Mediaset Premium, a trader said.
According to Il Sole 24 Ore, Vivendi and Al Jazeera had started a due diligence process on Mediaset Premium. The paper also quotes internal documents suggestion that the loss-making division could reach breakeven this year and turn in a profit of 55 million euros in 2017.
"Our initial reaction is that these numbers as very aggressive as Mediaset Premium has always produced tens of millions negative EBIT and the traditional Pay TV outlook is stagnant," analysts at Banca Akros said in a note to clients.
"The underlying assumption is then that the soccer bet would prove very successful."
Mediaset Premium won in February exclusive rights to show in Italy all live Champions League matches and their highlights for the seasons between 2015-2018. Analysts said Mediaset has invested 660 million euros ($901.9 million) to hold the rights.
By 0715 GMT shares in Mediaset were up 3.3 percent at 3.45 euros, outperforming a flat Milan stock index.
Mediaset declined to comment. It was not possible to immediately contact Vivendi and Al Jazeera. ($1 = 0.7318 Euros) (Reporting by Isla Binnie, editing by Lisa Jucca)