Telefónica seals €750m deal for Canal+ Spain

Prisa and Telefónica have definitively agreed the sale of Prisa’s 56% stake in pay TV platform Canal+’s holding company to the Spanish telecom giant for €750 million.

The agreement follows Prisa’s acceptance in principal of Telefónica’s offer to buy the majority stake in the platform on May 7. The deal will give Teleféonica, which already holds a 22% share in the holding company, DTS, a controlling stake of 78%, leaving Italy’s Mediaset with 22% through its Spanish subsidiary Mediaset España.

Later this week the Canal+ board will communicate the terms of the deal to Mediaset España, giving the latter a 15-day period to decide to exercise a right to sell its stake.

Mediaset España has yet to make any statement about the deal. Analysts have argued that the development will make Mediaset’s plans to create a new TV company incorporating its Italian and Spanish pay TV interests less interesting to investors.

The sale has yet to be authorized by the Spanish markets regulator the CNMV.

“This is great news for both Prisa and Telefónica. We announced some time ago our willingness to sell pay TV to concentrate the efforts of the Group on the business of education and information, with a special focus on growth in Latin America,” said Juan Luis Cebrián, executive chairman of Prisa.

“Our pay TV is renowned for its high quality and I am sure that Telefónica will consolidate its lead in Spain to the benefit of all subscribers.”

César Alierta, Telefónica’s chairman and CEO, said that the deal would be important for the development of Spanish-language pay TV and that it was “a significant step forward in the process of transforming the company into a leading digital telco.”

Canal+, formerly known as Digital+, has 1.66 million subscribers and last year posted revenue of €1.166 billion (US$1.6 bilion) with EBITDA of €28 million.