TVN gets right Onet

Polish television broadcaster TVN has signed an initial deal with its parent company, ITI Media Group, to buy a controlling stake in Grupa Onet.pl, which owns the country's leading internet portal, for zł.1.1 billion.

ITI is part of a holding company owned by the founders of TVN, who retained control of the broadcaster after its bourse debut in 2004. When the deal is complete, TVN will control 82.35 percent of Grupa Onet.pl. The company plans to launch a bid for all the remaining shares at zł.165 each and it will then delist Onet from the Warsaw Stock Exchange. The move will result in TVN cancelling its ongoing share buyback, increasing the broadcaster's net debt to three times its annual earnings before EBITDA from the current ratio of 2.6.

In a press statement, TVN's chief executive, Piotr Walter, said: "By combining the number-one commercial TV broadcaster with the number-one internet portal in Poland, we can directly access the highest growth segment of the advertising market."

On Monday, after news of the deal broke, shares in both companies reacted negatively. Grupa Onet.pl's share price closed at zł.139, valuing the company at zł.1.1 billion, but climbed back up to zł.158.50 on Friday. Bank Zachodni WBK Asset Management holds 6.15 percent in Grupa Onet.pl. The remaining 11.51 percent is free-floating.

Last year TVN's net profit stood at zł.209 million on revenues of zł.860 million. (Reuters)