Bid for Alma Media seen as prelude to shake-out in Nordic TV market

Schibsted would more than double its holding in Sweden’s TV4

print this

The recent actions by the Norwegian media group Schibsted have prompted speculation of a new deal in the Nordic TV market. The key company in all this is Sweden’s largest commercial channel, TV4.
      Schibsted lifted its holding in this company from around 5% to over 20% just over a week ago, and the offer made to buy Finnish media concern Alma Media would - if it materialises - more than double this figure. Alma Media owns 23.4% of TV4.
      The third significant player in TV4 is the Swedish publishing giant Bonnier, with 21.7%. In Sweden, Tuesday’s Schibsted bid for Alma Media has widely been seen as a move by the Norwegians to challenge Bonnier’s position in TV4 and drive the Swedish firm out of the TV business.
     
This interpretation sees the entire offer as a power-struggle over control of TV4. Such a view may be given additional credence by the prompt announcement from Schibsted that they are keen to sell off Alma Media’s provincial newspapers and even the Tampere-based Aamulehti, which is Finland’s second-largest daily.
      Schibsted’s interest in TV4 should be understood in the context of future digitalisation moves. In principle, Sweden has already reached a decision on digital TV, even though no precise dates have been set. The same goes for Norway and Denmark.
      Sweden’s TV4 was established in 1990. It has a monopoly on terrestrial analog commercial transmissions. The company’s financial performance has been burdened by operating licence fees and by other social obligations, which are likely to be removed in the years ahead.
     
Much the same situation concerns Denmark’s state-owned commercial channel TV2, in which the state is planning to sell off two-thirds.
      The market has been anticipating that some Nordic operator or consortium would be eager to build a strong Nordic television company for the digital era. Analysts have suggested that a player like this is most likely to come from Norway or Sweden, and probably not from Finland, which is still seen as somewhat culturally distant from the point of view of common programme production and purchasing.
     
Schibsted commented on Tuesday that it was not interested in making an offer for the Danish channel, but TV4 and the Swedish Stenbeck Group’s MTG have previously voiced such intentions.
      TV4's analog operating licence is up for review by the Swedish government next Wednesday. It is possible that the company could lose its licence to MTG’s TV3 or SBS’s Kanal 5, but pundits believe it is more likely TV4 will preserve its licence for the period from 2005 to 2007, after which Sweden would probably move over to digital TV.
      Right now the Swedes are watching carefully to see if Bonnier, who have concentrated hitherto on the printed word, will go into battle for their slice of the TV market. One possible strategy would be for Bonnier to join forces with the Norwegian company Orkla.
     
In any event, much of the discussion must remain moot for the time being, as Schibsted’s offer for Alma Media is by no means certain to go through as such.
      The market reaction on Tuesday was to see the Finnish company’s stock rising sharply. By the close of trading in Helsinki on Tuesday it had jumped up well beyond the EUR 11.40 and EUR 10.70 being offered for series I and series II shares respectively.
      It is now believed that a counter-offer may be put into play, and that Schibsted may be obliged to increase their bid and the premiums being offered on the shares.
      The fact that Bonnier itself is the largest shareholder in Alma Media, with a 33.3% holding, further complicates the issue. Bonnier and the other large institutional shareholders, including several Finnish insurance companies, have expressed the intention to utilise the full four-week grace period before they reach any decision on selling their interest in the company.


Previously in HS International Edition:
  Norwegian Schibsted Group seeking to buy Alma Media for EUR 705 million (21.12.2004)

Helsingin Sanomat