* Discovery Communications, Providence expected to
* ProSieben wants 1.3 bln euros for Nordic assets-sources
* Bids may not reach asking price-sources
* Disposal could pave way for sale of rest of German
By Simon Meads and Arno Schuetze
LONDON/FRANKFURT Nov 29 ProSiebenSat.1
is expecting two bids for its Nordic TV channels,
valued at more than 1 billion euros ($1.3 billion), five people
familiar with the situation said.
The disposal could pave the way for the sale of the rest of
the German broadcaster as its private equity owners KKR
and Permira carve up the company to make it more
attractive to buyers.
Rival TV group Discovery Communications and
private equity group Providence Equity Partners are expected to
table bids for ProSieben's Scandinavian assets, which include
Sweden's Kanal 9, Norway's TV Norge and Kanal 4 in Denmark, the
Bids are due on Friday and ProSieben is seeking about 1.3
billion euros for the business, the sources added.
Private equity house Nordic Capital is keen on the business
but one source said that a final bid is by no means certain
after its bidding partner, Swedish media group Bonnier, pulled
KKR and Permira bought ProSieben in 2007 for 6.8 billion
euros, one of the largest buyouts in Europe. But they are now
breaking it up to make it more digestible for prospective buyers
who are finding banks unwilling to lend as freely as they did
before the financial crisis.
The rest of ProSieben would be focused on Germany, which
potential buyers would find more attractive than a pan-European
Shares in ProSieben were up 0.6 percent at 22.5 euros at
1432 GMT, giving it a market capitalisation of more than 2.4
KKR and Permira own 88 percent of the voting shares, with
Dutch publisher Telegraaf Media Group holding the
remaining 12 percent.
ProSieben sold its Belgium and Netherlands TV and print
operations last year for 1.2 billion euros - more than 10 times
their earnings before interest, tax, depreciation and
amortisation. The asking price for the Nordic business would
equate to a similar earnings multiple.
However, the business may struggle to achieve that value and
Providence may yet decide not to bid, some of the sources said.
The price expectation for the Nordic business puts it on a
higher multiple than ProSieben itself, which trades at 4.5 times
earnings, and Europe's largest broadcaster RTL Group,
on 8.1 times earnings.
Possible bidders are worried about the company's ability to
increase its market share and the prospect of falling
retranmission fees - the fees that cable operators pay to
broadcasters to carry their programmes, the sources said.
ProSieben's private equity backers will push to pay
themselves a special dividend if they do complete a sale, while
the company's management wants some of the proceeds to be
reinvested in the business, another source said.
Discovery, ProSieben, KKR, Permira, Providence and Nordic
Capital all declined to comment.