Czech PPF Group Buys Bulgarian Media Group Nova Broadcasting from the Swedish MTG for €185 M

Czech PPF Group Buys Bulgarian Media Group Nova Broadcasting from the Swedish MTG for €185 M

Modern Times Group (MTG) agreed to sell its majority stake in Bulgarian broadcaster Nova Broadcasting Group (Nova) to Czech investment conglomerate PPF Group. The deal valued Nova at € 185 M. PPF Group would be acquiring full control of the company in an all-cash transaction by purchasing 95% from MTG and the remaining 5% stake from Eastern European Media Holdings S.A. The deal, subject to regulatory approvals, is expected to close in the first half of this year.

MTG exits Bulgaria more than a decade after entering the market through the acquisition of Diema group of TV channels in 2007. A year later, it bought Nova Televizia – one of Bulgaria’s two largest privately-owned free-to-air broadcasters – from Greece’s Antenna Group for € 620 M. In 2013, Nova Broadcasting expanded its digital footprint when it agreed to purchase 70% of the merged assets of Bulgarian radio broadcaster Darik and Netinfo, which operated a number of websites, including a video sharing portal and a webmail service.

MTG built Nova into Bulgaria’s number one commercial media group with 33% commercial share of viewing, and ownership of some of the country’s top digital brands, MTG’s CEO Jørgen Madsen Lindemann said. The group comprises 7 TV channels and 19 online businesses that together generated € 99.44 M in sales and € 19.56 M in operating income (EBIT) in 2017. The group employs 650 people. Nova currently holds the rights to broadcast in Bulgaria matches of the country’s top-tier football league, as well as England’s Premier League, the National Basketball Association (USA) and the World Boxing Super Series. It also recently acquired broadcast and sponsorship rights to the ATP World Tour 250 series event, the Sofia Open.

The deal is in line with MTG’s ongoing strategic transformation from a traditional national broadcaster to a global digital entertainer.MTG will use the proceeds from the sale to invest in its digital entertainment business, as well as in its Nordic Entertainment and MTG Studios divisions – which it was due to sell to Danish telco TDC before the deal collapsed (read more about that on page 6). The sale of Nova brings to a close the disposal of their international TV operations and leaves MTG as a more digitally-focused group. With the deal, MTG has effectively sold off all of its traditional TV assets – except for its content production arm MTG Studios and Nordic Entertainment, which run platforms like Viafree, Viaplay, and Viasat, as well as ad-funded Scandinavian TV channels.

Earlier this year MTG agreed to sell its 75% stake in youth broadcaster Trace in a deal that valued 100% of the business at € 40 M. Last year it also sold its Czech TV assets for € 116 M and its Baltic broadcasting business for € 100 M. Over the same period, MTG has bulked up its digital arm, MTGx, by investing in companies like browser-based games firm InnoGames and US games publisher and developer Kongregate. The Nova deal marks the latest stage of MTG’s exit from the CEE market, which was precipitated by the enforced sale of the stakes in the DTH platform Raduga and TV broadcaster CTC Media in Russia.

PPF Group, controlled by billionaire Petr Kellner, had € 35 Bn in assets, as of 30 June 2017, in sectors ranging from banking and financial services to telecommunications, real estate, and biotechnology. The Group’s reach spans from Europe, across Russia and Asia, to the US.

The Czech conglomerate was reportedly interested in further acquisitions in Bulgaria, with separate sources in Serbia and Bulgaria claiming PPF Group made an approach to buy the CEE operations of Nordic telecom provider Telenor. Telenor owns the second-largest mobile carrier in Bulgaria.


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