TV3 ‘worth €100m’ as Liberty Global tunes in

TV3 may be be valued at well over €100m if US cable giant Liberty Global decides to follow through and acquire the Irish television channel, according to senior sources.

TV3 ‘worth €100m’ as Liberty Global tunes in

It is understood that Liberty — owned by Irish-American John Malone — has started due diligence of the station.

Its owner, private equity group Doughty Hanson, has had plans to TV3 for some time. However, due diligence is at an early stage, a senior source has said.

Doughty Hanson has owned TV3 since 2006 and while it indicated their intention to sell the station, the recession that hit advertising revenues seriously delayed those plans, while the pick-up of the economy this year has helped spur interest in the business.

The loss of Coronation Street to new rival UTV Ireland was expected to make a huge hit on TV3 this year.

However, the station has weathered the UTV’s launch better than most observers had thought possible.

It is understood that TV3 is on course to post earnings before interest, tax, depreciation and amortisation earnings this year above an estimated figure of such earnings of around €8.5m last year.

Industry sources say that broadcasters such as TV3 are valued at ratings at over ten times earnings.

That means that the station could be worth well in excess of €100m, a senior source said.

Mr Malone’s Liberty Global already owns cable operator UPC in Ireland.

Any acquisition of TV3 may therefore be scrutinised by regulators here.

A spokesman for the Broadcasting Authority of Ireland said that any acquisition of a media asset could require the approval of the BAI, but that the Government can also refer a media acquisition to the Competition and Consumer Protection Commission, or to the BAI, under the new media ownership guidelines it published this week.

Any new owner of TV3 would be expected to compete even more aggressively with UTV Ireland and RTÉ.

Analysts say that UTV Ireland is having a tougher than expected time following its direct launch into the republic’s television market for the first time.

“It seems that UTV Media shareholders will have to be more patient than they expected when it comes to returns.

“With losses of £8.5m (€11.75) forecast for this year, we now believe that it will be 2018 before UTV Ireland turns a profit, and the new channel will likely depress [Group] returns in the interim,” Davy Stockbrokers said in a major research note published yesterday.

“However, UTV Ireland is likely to experience an improving environment going forward as it adjusts its schedule, improves its content and leaves behind its set-up problems,” the broker said.

Davy said that it estimated UTV Group shares were trading on a multiple of 11.6 times full-year earnings before interest, tax, depreciation and amortisation earnings.

“Given these multiples, the uncertainty in relation to UTV Ireland’s turnaround … we think it is unlikely that UTV will outperform the broader market or its overseas media peers in the near term,”Davy Stockbrokers said.

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