(Writes through, adds detail, background)
* Digiturk has enterprise value of $1.5 bln - sources
* Al Jazeera has hired Barclays to assist with bid - sources
* Cukurova Holding owns 53 pct of Digiturk, Providence has
* Formal sale process expected in early January - sources
By Dinesh Nair and Asli Kandemir
DUBAI/ISTANBUL, Dec 18 Qatari-backed broadcaster
Al Jazeera is considering a bid for a majority stake in Turkish
pay-TV company Digiturk to boost its soccer offering ahead of
the 2022 World Cup finals in Qatar, banking sources familiar
with the plans said on Wednesday.
A number of potential buyers have shown an interest in
Digiturk since a 53-percent stake in the company was seized by
Turkey's Savings Deposit Insurance Fund (TMSF) from Cukurova
Holding in May because of the conglomerate's debts to the state
Al Jazeera's interest stems from Digiturk's $321
million-a-year deal for exclusive rights to Turkey's Super
League championship, one of the sources said.
"It's really the football rights that differentiates
Digiturk from others, and the Qataris are keen to get that
access," the source said. "Otherwise, it does not make any sense
for them to look at a business in a country where the local
language is so dominant."
Digiturk has a market capitalisation of $1 billion and about
$500 million of debt, two of the sources said, giving it an
enterprise value of about $1.5 billion.
Al Jazeera, which operates under the patronage of the emir
of Qatar and his family, has appointed Barclays Capital
to assist with its bid, the sources added.
TMSF declined to comment on a stake sale and an Al Jazeera
spokesman was not available to comment.
U.S. private equity group Providence Equity Partners owns
the remaining 47 percent of Digiturk and has appointed J.P.
Morgan to evaluate its options, the banking sources
said. However, another source close to the U.S. firm said it was
not considering a sale.
Both Providence and J.P. Morgan declined to comment.
A formal bidding process is expected to begin in early 2014,
the sources said.
Non-binding offers have already been submitted by Turkey's
Dogan Group and Turk Telekom. In September Dogan
offered $742 million for a 53 percent stake, trumping Turk
Telekom's $530 million approach for the same stake in July.
"What we are seeing is that the local players are keen for
the majority 53 percent stake, while the international bidders
may want the whole business," another banking source said.
Al Jazeera is looking to continue its international
expansion. In January it agreed to buy Current TV, the
struggling U.S. cable channel founded by Al Gore and partners.
Terms of the deal were not disclosed but analysts estimated that
it could be worth as much as $500 million.
Turkey's pay-TV market had 4.1 million subscribers in the
second quarter of 2012, producing revenues of $26.8 million, up
52 percent on the previous quarter, according to the latest
available data from telecoms regulator BTK. Digiturk's market
share in the quarter was 61.73 percent, BTK said.
(Editing by Nick Tattersall and David Goodman)