Merger of Spanish TV Chanels

 

Spanish TV company Antena 3 said it was in advanced merger talks with smaller unlisted rival La Sexta, in a bid to save costs as a worsening economic environment dries up the advertising that funds free-to-air TV stations.

A source familiar with the talks said a deal could be announced as soon as Wednesday.

Antena 3 said in a statement the terms being discussed would give La Sexta shareholders, one of which is Mexico's Televisa with around a 40% stake, up to 14% of the new company.

A source familiar with the process said an agreement would value La Sexta, majority-owned by a group of Spanish shareholders, at around 240 million euros - made up of up to 140 million euros in new Antena 3 shares and another 100 million euros of La Sexta's debt to be assumed.

Antena 3 would also get tax perks from the purchase.

Antena 3 is the third-biggest channel in terms of audience in Spain, behind state TV's advertising-free TVE1 and Mediaset's Spanish unit, formerly known as Telecinco.

A deal between the rivals has been in discussions on and off for two years and is seen by analysts as making commercial sense after Mediaset Espana bought smaller Spanish rival Cuatro and given the tough outlook for the advertising which funds free-to-air television.

La Sexta's audience share in November was 7.2%, down 0.3 percentage points year-on-year, while Antena 3 had an audience share of 18.5% in the same month, up 2.0 percentage points.

"In principle La Sexta will get 7% of the enlarged company, with the possibility of extending that to 14% in function of how it meets certain targets over a number of years," a source familiar with the process told Reuters.

Shares in Antena 3 were to resume trading shortly, having been suspended at 4.40 euros.