March 11, 2020 / 9:47 AM / a month ago

Portugal's Cofina pulls plug on TVI acquisition as market turmoil scuppers capital hike

LISBON, March 11 (Reuters) - Portuguese publishing group Cofina has abandoned plans to buy Media Capital from Spanish firm Prisa, it said, after a share sale needed to finance the deal was scuppered by financial market turmoil linked to the coronavirus outbreak.

Shares in the company slumped as much as 14% after the announcement on Wednesday, while Prisa shares plunged over 13%.

Cofina stock had already dropped by more than a quarter from this year’s highs, reached in late January, to hit its lowest since December on Monday as the spread of coronavirus sparked hefty losses in world markets.

The group said in a statement shortly after midnight that its offer of nearly 189 million new shares had not found sufficient demand, and it had decided against a private placement due to “the recent significant deterioration of market conditions”.

A successful capital increase was a key condition for its 123 million euro ($139.29 million) acquisition of Media Capital, which operates one of Portugal’s biggest TV channels, TVI, to go ahead.

The deal would have made Cofina, owner of tabloid Correio da Manha and business newspaper Jornal de Negocios, the country’s biggest media group.

The transaction, which valued Media Capital at 205 million euros, included TVI’s debt of 75 million euros. Prisa said at the time the transaction would represent a loss in its consolidated accounts.

$1 = 0.8831 euros Reporting by Andrei Khalip; Editing by Jan Harvey

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