ITI (re)confirms IPO plans; Kozar replaced

ITI Group's decision last week to delay its Warsaw Stock Exchange (WSE) debut doesn't mean the media company is reconsidering whether to go public, the company said. "Our prospectus, which will expire in nine months, will be updated, and we'll have a chance to prove that our predictions are right," said Paweł Kosmala, ITI Group's corporate director. "But before we start our offering, all the conditions that made us decide to postpone ITI's debut on the WSE must disappear." According to a Polish pension fund asset manager who asked not to be named, ITI's initial public offering (IPO) may be successful if the share price is reasonable. "It's a very good company and everybody would like to have it in his portfolio, but the price cannot be too high," the source said. ITI, which owns local news station TVN24 and is already listed on the Luxembourg Stock Exchange, also has holdings in TVN and TVN7 television channels, in multiplex cinemas, movie production and an Internet portal. The group blamed its repeatedly delayed WSE debut on difficult market conditions both globally and in Poland. But analysts and fund managers said it was ITI's high price of zł. 9.75-zł. 14 a share that caused the IPO's failure. "It was the excessive price that made the offering fail," said Marcin Wójcik, an analyst at Bankowy pension fund. "(ITI's) decision didn't come as a surprise since most analysts agreed that ITI's offering might fail considering the proposed price range. In addition, the company's unclear structure and events in the U.S. (with the bankruptcy of global communications company WorldCom) seriously undermined the credibility of firms (and) made the atmosphere surrounding ITI even worse." ITI's Kosmala, however, said that some media and analysts had inaccurately portrayed the company. "(ITI was) a subject of a certain manipulation," he said. "I had the impression that the media were only focused on finding true or untrue gaps in what we were doing."

Last week, Erste Bank, which recommended against buying ITI's shares, withdrew its report on ITI. Friedrich Mostbock, the head of research at the bank's CEE Investment Banking Division, said the report was withdrawn so as not to disturb the transaction, although ITI had issued a press release outlining mistakes made by Erste Bank analysts. Kosmala defended ITI's price range, saying it was a fair reflection of the company's assets and growth potential. "The price became a problem only when the markets went down," Kosmala said. "On (July 1), the fall in the U.S. came, and on top of that Finance Minister (Marek) Belka resigned. While a large part of the offering was to be located abroad - and it's especially foreign companies that are sensitive to this kind of uncertainty - we decided that there (was) really no reason why we should sell. That offering wasn't our 'to be or not to be transaction.' " Delaying the IPO will complicate a deal that ITI has with SBS Broadcasting, a TV and radio operator in Europe. ITI was planning to raise $130 million from the offering - money that was to be mostly used to buy 33% of ITI's flagship TVN channel from SBS. "Obviously, the transaction we agreed on with SBS won't happen now," Kosmala said. "But I really can't say whether the transaction itself won't take place." ITI's listing was to become Poland's biggest offering in two years. The company announced its plans to list on the WSE in 2000, but the time was never right and the WSE continued its downward slide. After Jan Wejchert, the company's cofounder and chief executive officer, finally decided to take the plunge, share prices of European broadcasters fell and the WIG20 index dropped by 12%. "We couldn't have foreseen the market reaction to our offer because the price the market wants to pay depends on the general situation, and the situation was changing dramatically for the worse," Kosmala said. "The same analysts who today argue that the price range should be much lower could have said in 1999 that it should be set at zł. 40-zł. 50 because the market situation was such."

Messier departure sees Kozar leave, too The future of Canal+ Group, owned by France's Vivendi Universal, appears uncertain following last week's resignation of Jean-Marie Messier. As chief executive officer of Vivendi, Messier transformed Compagnie Generale des Eaux, a water company, into the world's No. 3 media empire. But according to market sources, Vivendi's new management might be looking to part with some of those holdings, including Canal+, which controls Canal+ Polska and Nowa Cyfra+, a Polish digital platform. Canal+ declined to comment. On the back of Messier's departure, Canal+ Polska chief executive officer, Christian Kozar, was replaced by Arnaud de Villeneuve. According to a company press release, Villeneuve will have strategic and operational responsibility for the production and distribution of the Canal+ pay channel and Nowa Cyfra+. Marine Lemonnier of Canal+ Group's communications department, wouldn't say why Kozar had been replaced. She also refused to say when Villeneuve would report to Warsaw. Villeneuve, 57, helped launch nine satellite channels and digital platforms in France's global territories and in Africa.