CEFC, the acquisitive Chinese energy group, and Penta Investments, the closely-held Slovak financial group, are bidding together for Time Warner’s stake in Central European Media Enterprises (CME), which runs television stations across Central and Southeastern Europe, according to a Reuters report.

If the bid were successful, it would represent a big step by a politically well-connected Chinese company into Europe’s media. CEFC has long been rumoured to be close to China’s military intelligence. CME’s most profitable TV stations are in the Czech Republic and Romania. It also operates stations in Slovakia, Slovenia, Croatia and Bulgaria.

According to Reuters, CEFC will provide most of the financing for any deal. Nasdaq-listed CME has a market capitalisation of $623mn and more than $1bn in debt. Time Warner owns a 46.5% stake but this rises to 75% if it exercises its warrants.

Time Warner has been trying to offload CME since it accepted a takeover bid from telecom AT&T in October last year.  Several powerful local financial groups have been rumoured to be interested, including PPF, owned by Petr Kellner, Central Europe’s wealthiest man, which once briefly owned its Czech station, TV Nova. Slovak media have reported that Czech and Slovak oligarchs, including Kellner and Penta, were joining together to buy some of CME’s assets.

Up to now Time Warner had been expected to sell its six operations separately. It had agreed to sell its Croatian and Slovenian operations to KKR-owned United Group for $230mn in July, but the Croat side of the deal was blocked by the regulator earlier this month on competition grounds.

Penta already has invested in print and online media in the Czech Republic and Slovakia, its main markets, but this has been seen more as a defensive move to protect its reputation than as a major new investment area for the group. Penta has a controversial reputation after a scandal over its links with Slovakia’s onetime leading centre-right party SDKU brought down its last government in 2012.  When it acquired Sme, Slovakia’s leading liberal daily, in 2014 most of the top journalists left to form a new online media, Dennik N.

CEFC has previously been working closely with J&T, the other leading Slovak financial group, to make acquisitions in the Czech Republic and Slovakia, though it did buy the Florentinum office building in Prague from Penta in November 2016.

Reuters speculates that CEFC may face a challenge to get the deal done following Beijing’s recent clampdown on capital outflows in non-strategic sectors such as media. It also says that the AT&T and Time Warner deal is being challenged by the US Department of Justice.