Agora makes bid for AMS; RMF FM strikes back
Agora's public bid last week to acquire up to 25% of shares in outdoor ad company Art Marketing Syndicate (AMS) could give the media group a large source of revenue other than its flagship product, the daily Gazeta Wyborcza, analysts said.
The bid to acquire 1.254 million shares in the Poznan-based AMS, which along with Agora and the portal Interia are the only media companies listed on the Warsaw Stock Exchange, would also give Agora 24.99% of voting rights. According to Agora's press release, the company plans to become a minority shareholder in AMS and later purchase additional shares to leverage a "significant impact on AMS' activities."
Prior to the announcement, market speculations circulated for weeks that Agora would take over an outdoor advertising company to diversify its revenue base, which also includes income from the firm's radio and Internet operations.
"It's shrewd of Agora to play like that," said Andrzej Kasperek, an analyst with COK Banku Handlowego. "Agora was already in talks with AMS last year and speculations were that while (Agora) had offered zl. 60 per share, AMS (shareholders) wanted zl. 100, so negotiations were broken off. Agora took its time and is now acting to get ahead of potential competitors."
AMS, which was set up 11 years ago, has an estimated 35% of the billboard market. Agora made its bid for AMS' shares at zl. 60 per share, 34% above last Monday's market price. Despite doubts expressed by analysts as to whether any of AMS' shareholders will respond to Agora's bid, Kasperek said the price offered by Agora was good and that the company should succeed in finding shareholders willing to sell. "It's a very high price that Agora is ready to pay despite the fact that it's not buying a controlling stake," Kasperek said.
BB Investment, AMS' main shareholder with a 36.67% stake, has already indicated that it is unwilling to sell any of its shares. "As far as we know, BB Investment has declared they are not selling," said Magda Dul, spokeswoman for AMS. The company's other main shareholders include Bank Gospodarki Zywnosciowej (BGZ) with an 8.3% stake and Outdoor Capital Establishment (OCE) with 6.1%. AMS' stock in free float is estimated at 41% but according to Kasperek, smaller shareholders' reactions to the news could be unpredictable and Agora may end up with even less than 25%. "They might be able to acquire some 20%," he said.
Radio RMF FM, the nation's top national commercial broadcaster, is still looking to keep its local stations on the air despite a National Radio and Television Council (KRRiTV) decision last month that would make them uncompetitive in local markets.
The council revoked RMF FM's right to split its advertising and programming time in smaller cities to strengthen the position of local broadcasters, which are unable to compete with national broadcasters for local ad revenue.
Last week, Team FM, a subsidiary of RMF FM, applied to the KRRiTV for broadcasting licenses for 16 local stations, which would operate within the new Radio Nostalgia group. Anna Kozlowska, the PR manager at RMF FM, said the new radio group would employ staff from RMF FM's 15 local stations who would otherwise lose their jobs.
"RMF FM's former local stations, which after the old broadcasting license expires will cease to exist, could serve as a basis for the new Radio Nostalgia," Kozlowska said. "It's an idea to save the company all those trained people and last but not least, the zl. 18 million ($ 0.44 million) we invested in our local branches." She said RMF FM employs 200 people in its local stations and that the KRRiTV's decision would ruin their profitability.
Radio Nostalgia would be geared toward 35-50 year-olds and feature news and music of the 1960s, 1970s and 1980s. According to Kozlowska, the station's news services would only be local, but they will also provide road and weather services, a holdover from RMF FM's previous local programming.
Luxembourg-based Societe Europeene des Satellites (SES Group), an international satellite operator, is going global.
SES Group, owner of Astra, a direct-to-home satellite system that transmits television programs for Polish digital platform Wizja TV, has formed a new company called SES Global and agreed to buy General Electric's satellite division GE Americom in a $5 billion deal last week.
General Electric Capital Corp. (GE Capital) will have 20.1% of voting rights and a 25.1% stake in SES Global. "We're mainly doing it for the broadband sector," said Yves Feltes, PR manager at SES. "We have recognized that there is a need to provide global coverage for the multimedia and Internet protocol-based services. It's clear that a number of broadcasters with international operations are looking for one operator to provide services to different regions of the world and we are going to offer truly global connectivity in the broadband sector."
Joining the two companies creates a global broadband satellite services provider with a combined fleet of 28 wholly-owned satellites and 13 more partially owned satellites covering Europe, North and South America and Asia.
