Sat TV bid spurs Telefonica, Vivendi shares

November 24, 2008 Shares in Spanish media giant Telefonica and France's Vivendi rose 5% apiece Monday on reports the companies are in talks about pairing to bid for Digital Plus, the satellite TV business being offloaded by debt-laden Spanish media group Prisa. Analysts have valued the business at six to eight-and-a-half times 2007 earnings before interest, tax, depreciation and amortization, giving it a price tag of 2 billion-2.8 billion euros ($2.6 billion-$3.6 billion), but cautioned that the touted joint bid might not be supported by Vivendi shareholders. An acquisition of Digital Plus may be negative for sentiment following integration issues with the recent Neuf Cegetel acquisition, and we believe investors want to see Vivendi focus on integration rather than acquisitions," said UBS investment analyst Polo Tang, adding, "Digital Plus ... is being sold by Prisa in an attempt to pay down debt.

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