February 18, 2010 / 3:51 PM / 8 years ago

UPDATE 2-Broadcaster CME buys Bulgarian bTV from News Corp

 * Agrees $400 mln cash purchase
 * Will create new subsidiary to consolidate Bulgarian ops
 * Shares little changed
   (Adds analyst, details on Bulgaria market)
 PRAGUE, Feb 18 (Reuters) - Central European Media Enterprises (CME) (CETV.O) CETVsp.PR has agreed to buy Bulgarian television station bTV for $400 million from News Corporation (NWSA.O), CME said on Thursday.
 The deal will give CME Bulgaria’s most watched station, and add to its holdings of Pro.BG news and entertainment station. The sale should be finalised in the second quarter, CME said, and could be adjusted based on working capital targets.
 It said as part of the agreement it would buy Top Tone Holdings Limited’s 20 percent stake in Bulgarian Pro.BG. In exchange, Top Tone will take a 6 percent ownership stake in a new CME subsidiary that holds bTV and Pro.BG. [ID:nWNAB8969]
 Shares in CME were little changed after the announcement, and closed 1 percent down at 527.5 crowns in Prague.
 CME’s Nasdaq shares gained 0.2 percent to $28.532. News Corp shares added 0.1 percent to $13.46.
 Vaclav Kminek, an analyst at Ceska Sporitelna in Prague, said Bulgaria’s TV ad market was worth around $200 million, while synergies could be made with CME existing assets.
 “We see the news as positive, while we expect the price to fall in the range EUR 300-400 million, which is appealing based on our valuation,” he said.
 The acquisition follows CME agreeing to sell its Ukrainian operations for $300 million last month. [ID:nWNAB6045]
 “The acquisition of bTV is the next step in repositioning CME after the sale of our Ukrainian operations,” Chief Executive Adrian Sarbu said in a statement. “bTV greatly complements our portfolio of broadcasting assets.”
 CME operates in six central and eastern European markets, with the Czech and Romanian markets its biggest. Its revenue fell over 30 percent in the third quarter, although a year-long decline in advertising spending bottomed out.
 It releases full-year results on Feb. 24.
 In 2008, CME earned revenue of $1.3 million, but showed a $10.2 million EBITDA loss.
 Speculation about the deal had swirled for several months. A source told Reuters last month that the sale price being discussed was 500 million euros ($677.8 million). [ID:nLDE60P2A9]  (Reporting by Jason Hovet, editing by Mike Peacock and David Cowell)        

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