PRISA and Telefónica close sale of CANAL +

The phone operator will pay Prisa 750 million euros for a controlling stake in DTS

PRISA and Telefónica today signed an agreement for the sale of 56 per cent of DTS, the CANAL + pay-TV platform controlled by PRISA.The deal, which was signed by the heads of both companies at Telefonica’s headquarters, comes after the negotiation period announced on May 7, and with the approval of the Boards of Directors of both PRISA and Telefónica. The agreed purchase price amounts to 750 million euros.

Telefonica already owned 22% of DTS, meaning that it will now control 78 % of the company. The other 22 % is held by Mediaset España, which holds a right of first refusal on the operation.

According to Juan Luis Cebrian, executive chair of PRISA: “This is great news for both PRISA and Telefónica. We announced  some time ago our willingness to sell pay TV to concentrate the efforts of the Group on the business of education and information, with a special focus on growth in Latin America. Our pay-TV is renowned for its high quality and I am sure that Telefónica will consolidate its lead in Spain to the benefit of all subscribers. "

Meanwhile, César Alierta, CEO and executive chairman of Telefónica, described the operation as "very positive" and said it was an important step in the development of pay-TV in the Spanish language. Alierta also hailed the agreement as “a significant step forward in the process of transforming the company into a leading digital telco."

The Board of Directors of CANAL + ( DTS -- Distribuidora de Televisión Digital ), is set to meet later this week to communicate the terms of contract to Mediaset España, which owns a 22 per cent stake in Canal +. Mediaset then has a period of 15 calendar days thereafter to exercise its right of first refusal or co-sale rights in accordance with the provisions of the bylaws and the DTS shareholders agreement.

The transaction is subject to approval by PRISA’s creditor banks and the competition authorities.

Since first going on air in 1989, CANAL + has led the market for pay television in Spain, where it was a pioneer. It today has 1,661,381 subscribers and an ARPU ( average revenue per user per month ) of 43.5 euros. At the end of 2013, CANAL + revenues totaled 1,166 million euros, with EBITDA of 28 million.