Scripps to launch mandatory buy-out offer for TVN

By bne IntelliNews May 20, 2015

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Scripps Interactive Networks, which agreed in March to buy a 52.7% stake in Polish listed broadcaster TVN, plans to offer PLN20 (€4.9) per share in a mandatory buy-out offer, it said in a US market filing on a debt issue late on May 19.

Scripps' documentation for the $1.5bn debt issue in the US, which will be used to power the acquisition, says it will make its mandatory tender offer "at an assumed purchase price of PLN20 per share". Scripps also says it plans to redeem €453mn in TVN notes.

Under Polish law, Scripps is required to offer a buy-out to minority shareholders to increase its stake to at least 66%. The offer is at a premium against the current price of TVN stock, which opened at PLN18.2 on the morning of May 20.  The offer is also roughly comparable to the price per share it has agreed to pay for the majority stake. 

Scripps agreed to buy the majority stake in the operator of Poland's top internat portal, as well as several top TV channels, from ITI and Canal+ Group for €584mn and €854mn in assumed debt. The US media group beat Germany's Bauer as well as compatriots Time and Discovery to the deal. 

The purchase of the 52.7% stake still has to be given the green light by regulators, with Scripps hoping to finalise it early in the second half of 2015. Under Polish law it must make the mandatory offer within three months. However, its plans for consolidation of TVN shares remains unclear.

Scripps was reported in March to be considering a move to de-list TVN. Yet the buyer says it is still to come to a decision on a full buy out.

The documentation on the $1.5bn issue of senior unsecured notes is based on an assumption that Scripps will purchase TVN shares up to the 66% threshold. The US group noted "uncertainty as to whether the company will actually elect to purchase the full 100% of the remaining public ownership in TVN".

"Such a decision will be made at a later date based on a variety of factors, including market conditions and strategic considerations," Scripps said.

The US company will use the capital raised in the debt issue, on top of cash in hand and borrowings under its revolving credit facility, to complete the acquisition of TVN and refinance the Polish company's debt. The sale of the notes is expected to close on June 2.

TVN gives Scripps a portfolio of free-to-air and pay TV lifestyle and entertainment channels. It includes Poland’s leading 24-hour news channel TVN24 and business news channel TVN24 Biznes i Swiat. TVN enjoyed a market-leading 22% share of Polish viewing in 2014.

TVN stands to benefit from Poland's rapidly improving consumer market. The ad market has been growing quickly in recent months, and is seen set to continue in the coming years.

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