DAVOS INTERVIEW Prisa's CEO bullish on Media Capital bid; FY above expectations

DAVOS INTERVIEW Prisa's CEO bullish on Media Capital bid; FY above expectations

	Published : Wed, 24 Jan 2007 14:19 By : Agencies Print this Story

DAVOS, Switzerland (AFX) - Grupo Prisa CEO Juan Luis Cebrian said he is optimistic about the outcome of Prisa's bid for Portugal's Media Capital, which started yesterday, but concerned about legal problems when the bid closes.

In an interview at the World Economic Forum, Cebrian also said 2006 full-year results at the Spanish group should be slightly better than analysts' expectations, and is optimistic for this year and 2008.

'The bid for Media Capital is a voluntary bid. Then (after this closes) we will be asked to launch a mandatory bid' for remaining shares, he said.

'I am optimistic about the success of this bid,' he said, adding this first offer at 7.40 eur per share should close in mid-February.

Cebrian's worries on the requirement for the second bid involve new Portuguese legislation, which he said has a retroactive impact and could be challenged in the courts by Prisa.

In particular, Prisa is concerned by the price of the second bid being based on market prices in last six months, which Cebrian said are distorted by low levels of speculative trading in Media Capital shares.

'We are going to discuss the price (of the second bid) with the authorities, and there is scope for arbitration,' he said.

However, Cebrian said he hopes most investors will accept the first offer because the price is above analysts' consensus -- though below the market price -- in order to avoid uncertainty.

Bertelsmann AG's unit RTL holds a 33 pct stake in Media Capital and Cebrian said he does not know if RTL will launch a rival bid for the Portuguese firm, nor if it will sell its stake in the bid.

Prisa has a 33 pct stake in Media Capital but with allies has a reported 45 pct stake.

Cebrian said Prisa is ready to work with RTL if it remains a shareholder in Media Capital, adding that Prisa is 'good very friends with Bertelsmann on many aspects, and dealing with them on many issues in Spain'.

Prisa and Bertelsmann could work together on TV production in Iberian peninsula, while there is scope to cooperate given RTL's large network in Europe and Prisa's in Latin America, where RTL is not present, he said.

If Prisa wins control of Media Capital it will gain control of Portugal's strongest TV channel with a 34-35 pct audience share, and with room to develop radio operations in the country, he said.

In addition, Prisa can generate synergies with its operations in Portuguese-speaking Brazil, he said.

In Chile, where Prisa is buying further radio operations, the group may have to meet competition tribunal demands before it closes the deal.

In Spain, Cebrian said 2006 operations have gone have ry well. Better than expectations of analysts. I hope, though not a big difference.'

Newspaper El Pais circulation has 'not declined so much. The last quarter of 2006 has been better than the last quarter of 2005. The problem has been more on add-on products and promotions,' he said.

El Pais has lost 4-5 pct circulation in 2006, which is 'not drastic', adding the newspaper continues to generate a 30 pct EBITDA margin.

El Pais advertising sales have 'gone quite well', about 2-3 pct points above the overall market trend, he said.

After the summer, El Pais will launch as 'a global newspaper' in Spanish, building on the Mexican, Argentina, Brazil and European operations, he said.

In TV in Spain, the recently launched free-to-air channel Cuatro is 'doing very well' as is Prisa's regional and local TV operation, though the latter is losing money, he said.

On the quoted Sogecable, in which Prisa has 43 pct, there are no plans to split the free-to-air and pay-TV operations, as some analysts have suggested, to boost the company's stock value, he said.

Sogecable is happy with present arrangements for buying TV rights for football games and believes brokers, rather than rival operators, are responsible for bidding up prices, he said.

In addition, some regional TV operators are receiving state funding to buy rights, which is also inflating prices, he said, adding the Spanish courts or the European Commission should intervene.

Cebrian said he hopes to see further growth in 2007 results, boosted by the growing Spanish economy, the end of newspaper circulation declines, Prisa's news sports newspaper, and increased contributions from the Cuatro channel.

'This year will be very good year for Cuatro and good for pay-TV. In internet, we have not yet seen the very positive trend seen in the UK', he said.

'2007 is going to be pretty good and 2008 will be fantastic,' he said, attributing 2008 gains to the completed launch of Cuatro.

nigel.tutt@thomson.com

nt/ic

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