Telefonica begins sale process of BB producer Endemol

by Alex Donohue Brand Republic 09-Feb-07, 11:00

LONDON - Spanish telecoms giant Telefonica is to start the bid process for 'Big Brother' and 'Deal or No Deal' producers Endemol next week by giving the go-ahead to sell the business, which it acquired in 2000.

According to reports, Telefonica has appointed investment bank Merrill Lynch to oversee the sale of its 77.7% stake in Dutch company. The aim is to complete the sale by the end of March.

Endemol's 2005 revenues stood at €900m, and its current market capitalisation is around €2.6bn (£1.7bn). Telefonica acquired the business for €5.5bn in 2000. It floated a 22.3% stake on the Euronext stock exchange in November 2005.

Telefonica said its decision to sell its remaining stake in Endemol, which was announced last summer, was because the business was no longer central to its telecoms operations. A general meeting on February 14 will be used to secure shareholder approval for the sale.

Early reports suggest ITV is considering a bid for Endemol. However, no successful bidder would have access to the 'Big Brother' franchise until the end of 2010 when the reality show's deal with Channel 4 comes to an end.

News Corporation and Disney, which owns 5% of the business, have also been linked to acquiring Endemol, although no clear suitor has emerged. The company's founder John de Mol has built up a 5.15% stake in the business and according to the FT is interested in putting together a consortium, as is managing director of Endemol France Stephane Courbit.

Share prices at Endemol surged by more than 5% when News Corp chairman and CEO Rupert Murdoch hinted he was interested in acquiring the company late last month.

Telefonica has previously turned down Time Warner's £1.38bn approach for the company in October 2004. Telefonica also rejected interest from German broadcaster RTL in 2002, but the offer amount was not disclosed.