Greece's OTE in talks to buy rival's pay-TV business
ATHENS (Reuters) - Greek telecoms company OTE said it was in preliminary talks with the main shareholder of a small rival, Forthnet, to buy its subscription television operations.
OTE's move comes two weeks after its biggest domestic rival Vodafone acquired an option to increase its 6.5 percent stake in Forthnet to 19.75 percent.
Gaining control of Forthnet's pay-TV business Nova would help either OTE or Vodafone boost their market share and squeeze more revenue from customers.
Forthnet shares jumped 19 percent in Athens on Tuesday, giving it a market value of 144 million euros ($196 million), with traders speculating that a bidding war may erupt for Forthnet. The shares were not trading early on Wednesday.
"There have been preliminary contacts between OTE and Forthnet's major shareholder Forgendo Ltd., regarding the Nova pay-TV operations," OTE said in a bourse filing.
Forgendo, which is controlled by Emirates International Telecommunications, holds a 44 percent stake in Forthnet.
OTE, a former monopoly which is currently 40-percent-owned and managed by Deutsche Telekom, is betting on high-speed internet and subscription television services as a way to stop losing telephone service clients to cheaper rivals.
"OTE has been developing its pay-TV operations, as it believes that pay-TV is an area with growth potential," OTE said in the filing, adding that it was normal to "review all business options in this direction".
Its shares were up 0.4 percent at 11.42 euros in Athens at 0829 GMT, outperforming Greece's benchmark stock index which was down 0.7 percent.
(Reporting by Harry Papachristou; editing by Tom Pfeiffer)