Canal Plus to control united satellite group

gameboy

The French television companies in talks over a “combination” are studying two possible structures for uniting France’s rival satellite TV providers and take on the threat from telecoms groups.

Vivendi Universal, the media group that has a majority stake in the Canal Sat operator, is trying to agree terms with TF1 and M6, the television groups that own TPS, the rival satellite platform, in a deal due to be concluded before Christmas.

The first structure would see TF1 and M6 take stakes in Canal Plus, Vivendi’s wholly owned subsidiary, and fold TPS into the whole. The second would involve the creation of a new company.

In either case, Canal Plus would hold a controlling stake but the division of equity is yet to be agreed.

Patrick Le Lay, TF1 chief executive, has previously resisted the merger of the two groups.

Observers believe the growing threat of competition from telecoms groups offering “triple play” – television, internet and telephone over broadband – has forced the company to reconsider.

Belgacom, the Belgian telecoms operator, won rights to Belgian football earlier this year. Vivendi and TPS are concerned that telecoms companies in France will begin to fight fiercely for key content such as football and films.

“A merger would be fantastic news,” said Nick Bertolotti, analyst at Credit Suisse First Boston. “It would solve this miserable situation of cut-throat war in French pay TV.”

Analysts estimated potential savings for marketing, programming, transmission and overheads at €250m-€500m ($299m-$598m). The competition between the two satellite TV providers has kept their operating margins at about 5 per cent compared with about 20 per cent for BSkyB in the UK. Mr Bertolotti said a merged group could hope to end up just below BSkyB’s level.

After the structure has been resolved, the companies will concentrate on preparing their case for an expected antitrust probe. They hope the competition from telecoms companies that has spurred the deal will act as their defence against antitrust charges.

Every stakeholder in the deal saw its shares jump on Monday. Vivendi rose 3.5 per cent €26.00, TF1 rose 8 per cent to €23.91 and M6 rose 4 per cent to €23.76.

Source: FT

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Only he who does nothing, does nothing wrong.

EgyptDUDE

thanks
doesnt say anything about encryptions and which will demonate that field
some say TPS will move to Astra sat
anything on that?

Analoguesat

You can bet your bottome dollar they will ditch the compromised encryption. Its happened time and again when companies are merged.

BGonaSTICK

Well, with six months until the end of the Premiership, it could be a good time to buy an ART card...

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