16 March 2015

Reuters

BY ADRIAN KRAJEWSKI

WARSAW Mon Mar 16, 2015


 (Reuters) - U.S. media group Scripps Networks Interactive agreed to buy a majority stake in Polish broadcaster TVN for 584 million euros ($615 million), gaining a foothold in a TV advertising market where revenues beat the global average and grew 6 percent last year.


Scripps, which owns the Travel Channel and the Food Network, said it would buy the 52.7 percent stake in Poland's second largest private TV network from local financial holding firm ITI and French media firm Vivendi.


"Poland is a good reference market for eastern Europe as the strongest and most advanced market," Jim Samples, who heads Scripps' international operations, told Reuters.


"We will look for other markets like Poland. For the time being the case of TVN and Poland has been the most interesting."


The U.S. firm is gaining control of a group which is valued at a fifth of its own market valuation. Under the agreement, Scripps will also take on debt worth an overall 840 million euros.


The deal values TVN at around $1.84 billion, or around 20.5 zlotys per share, Reuters calculations show, above the stock's 18.07 zloty Friday closing price.
Following regulatory approval, Scripps will launch a tender to increase its stake to at least 66 percent. The U.S. group said it might delist TVN altogether.


"We are weighing the pros and cons of keeping TVN public. For the time being we want to meet all regulatory requirements. We may delist TVN, but no decision has been made yet," Scripps' development director Joseph NeCastro said.


TVN offers Scripps -- a newcomer to the Polish market -- a diverse portfolio, including news broadcaster TVN24 and thematic channels. It broadcasts popular reality TV formats including the Polish version of Project Runway.

Based in Knoxville, Tennessee, Scripps expanded into Europe in 2011 through a joint venture in Britain with BBC Worldwide.


The Polish TV advertising market's recovered last year to reach revenues of 3.8 billion zlotys ($969 million). That helped TVN to a 3.6 percent growth in sales to $407 million, equal to 15 percent of Scripp's 2014 revenue.


Vivendi's Canal Plus agreed to buy into TVN three years ago in a wider deal that made Poland its second market after France.


Vivendi is focusing on its Polish pay-TV operations, moving away from free-to-air television, where advertising revenues are under pressure from the Internet and on-demand TV viewing. ($1 = 0.9491 euros)

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