Bloomberg News

TVN Falls After Starting ‘Strategic’ Talks With Canal Plus

October 27, 2011

(Updates with details of talks in fifth paragraph.)

Oct. 27 (Bloomberg) -- TVN SA, the biggest Polish television network, fell as much as 3.4 percent after saying it’s in exclusive talks with Canal Plus SA on a strategic partnership, as analysts said the message is “unclear.”

TVN traded down 2 percent at 14.55 zloty as of 2:38 p.m. in Warsaw, giving the company a market value of 5 billion zloty ($1.62 billion). The benchmark WIG20 Index gained 3.2 percent.

ITI Holdings SA, which owns 56 percent of TVN, awarded Canal Plus, a unit of France’s Vivendi SA, exclusivity for the partnership talks, TVN said in an e-mailed statement today. This follows a July 7 announcement that ITI is “reviewing its strategic options regarding its controlling stake” in TVN. Markus Tellenbach, TVN’s chief executive officer, said on Aug. 11 that he “would assume” there are more than five potential buyers for the broadcaster.

“The information that came out today is negative,” because it’s unclear what the subject of the talks is, Lukasz Wachelko, an analyst at Deutsche Bank AG, said by phone from Warsaw today. “The probability that there’ll be a buyer of ITI’s stake that announces a tender for the remaining shares became smaller.”

Vivendi is in talks to buy the stake, according to a person with knowledge of the situation. It may initially make an investment smaller than the 56 percent currently held by ITI and then gradually build up to buying all of its stake, the person said, declining to be identified because the talks are private. Vivendi and its Canal Plus pay-TV unit are acting alone in the talks, the person added.

‘Working Hard’

Both companies are “working hard” to reach an agreement by the end of the year, Wojciech Kostrzewa, ITI’s chief executive officer, said in an e-mail. The company declined to comment on whether the negotiations include the sale of the 56 percent stake.

Canal Plus spokesman Antoine Banet-Rivet also declined to comment beyond the statement.

“It’s not obvious from today’s announcement that the negotiations are about the sale of the stake,” Sobieslaw Pajak, an analyst at Dom Maklerski IDMSA in Warsaw, said by phone. “Expectations that a potential new owner announces a tender for 100 percent of TVN shares may be too optimistic,” he said, as a bid for 10 percent, which would take the stake to 66 percent, would be enough under Polish law.

According to Pajak, some investors may be disappointed because, according to press speculation, they may have expected the process to end earlier. “The talks might be more difficult than expected,” he said.


Vivendi SA and Time Warner Inc. were bidding to buy TVN, which has assets including Poland’s biggest Internet portal,, and N, the third-largest satellite-television operator, Gazeta Wyborcza reported on Oct. 6. ITI was to pick a bidder for exclusive talks by Oct. 15, the newspaper said.

Canal Plus owns Poland’s second-largest satellite operator after Cyfrowy Polsat SA, the biggest.

“There are still many scenarios possible, including delisting of TVN, merging it with Canal Plus’s Cyfra or a split of its operations, so it is hard to estimate the deal’s impact” on the company, Piotr Janik, a Warsaw-based analyst at KBC Securities, said by phone.

Canal Plus gained 2.5 percent to 4.56 euros in Paris trading.

--Editors: Alan Purkiss, Chris Peterson

To contact the reporters on this story: Maciej Martewicz in Warsaw at; Marta Waldoch in Warsaw at; Matthew Campbell in Paris at

To contact the editor responsible for this story: Frank Connelly at

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