Global communications giant Liberty Global, owner of television cable company UPC Ireland, has struck a deal to buy broadcaster TV3 for €87m, a development that will stiffen competition for RTÉ and the troubled fledgling station UTV Ireland.
The acquisition is only the second significant purchase anywhere in Europe of a television broadcaster by Liberty, and represents a statement of intent to expand TV3.
“UPC’s plan is to get behind us. It is part of a $42bn giant. They are buying us for growth and to invest in us for the long term,” said David McRedmond, chief executive at TV3.
He said there were already links between the companies because the broadcaster’s new soap, Red Rock, is co-produced by a unit that is 50% owned by Liberty.
“I am not saying that they are going to pour money into us, but they are planning for growth,” he said.
Mr McRedmond along with other senior executives who hold small stakes in TV3 will stay on to run the station under the new owner. The price represents just over 10 times the earnings before tax and interest of €8.6m that TV3 earned last year.
The purchase will have to be approved by the Government and the Competition and Consumer Protection Commission, but is expected to clear all regulatory hurdles. However, completion of the deal is expected to take a number of months and could drift into next year.
UPC is owned by US giant Liberty Global. It will pay an initial €80m for TV3 and its sister channel, 3e. It will pay an additional €7m if TV3 hits certain performance targets.
The deal is being viewed as securing of TV3’s long-term future. Private equity group Doughty Hanson which bought the channel in 2006 had been looking to sell the business for some time, but its plans were stymied by Ireland’s economic crash and the slump in advertising revenues.
However, this year’s recovery has stirred fresh interest in TV3. The Irish Examiner reported last month that TV3 was hoping to secure a €100m exit price.
Due diligence by Liberty Global had begun in recent months. That company is owned by Irish-American businessman John Malone.
UPC Ireland’s chief executive, Magnus Ternsjo, said: “The investment we are making secures the long-term future of TV3. With its wide range of home-grown programming, TV3 holds a unique place in the heart of Irish viewers.”
TV3 currently has a 12% share of Ireland’s television audience, making it the number one channel behind RTÉ 1.
Last year, it posted its best operating results since 2008.
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