RTL Group will not exercise its call option to acquire the 49% of YouTube multichannel network BroadbandTV that it does not already own, and has decided to explore “all strategic alternatives” for the company together with minority shareholders.
Luxembourg-based RTL has hired boutique investment advisor outfit Liontree to lead the process.
An RTL spokesman told TBI sister title DTVE that RTL and the minority investors aimed to conclude the process of exploring strategic alternatives by the end of the year. He said that all options were on the table, including the addition of a new strategic investor, an IPO – with RTL retaining its existing 51% stake – or a sale of the company.
BroadbandTV’s largest minority shareholder is the company’s founder and CEO Shahrzad Rafati. Interviewed by US trade paper Variety, Rafati said that the decision by RTL and minority shareholders was “amicable” and would allow the company to consider what was in the best interest of shareholders, employees and customers.
She pointed out that BroadbandTV remained a standalone entity that had not integrated its operations with RTL.
The Canadian MCN has a strong record to date, generating over 22 billion monthly impressions across its network of content creators.
“The company has grown significantly, so it suggests that some of the minority shareholders may want to see a return on their investment,” Paolo Pescatore, director, multiplay and media, at analyst outfit CCS Insight told DTVE.
“The future continues to be bright given the explosion we’ve seen in OTT video and recent corporate activity. Regardless of what happens, we expect RTL to continue having a prominent role in the company.”
While BroadbandTV has grown rapidly, digital activites as a whole have contributed a relatively small fraction of RTL’s overall revenue to date.
However, RTL has made digital growth central to its strategy to tackle the challenge of competition from internet giants. CEO Guillaume de Posch told an audience at MIPTV in Cannes last year that companies like Facebook and YouTube along with other MCNs were “trying to grab our business”.