Altice will “force” the market to take action. Impresa may be the target
Altice has confirmed it is negotiating the purchase of Media Capital. The Portuguese bank BPI says the deal may force the other players to react, which means Impresa may be one of the main targets.
If Altice purchases Media Capital, it will force the other players to react. NOS will be forced to strengthen their contents and Impresa may become a target, the Portuguese research firm BPI states.
This Sunday, Altice, owned by Patrick Drahi has confirmed in a press release to the market that they are negotiating the purchase of the Media Capital group, the holder of the Portuguese TV channel TVI, among other media. BPI states: “This news is not really a surprise, as it has been rumoured in the press in the past weeks and follows the cancelation of the sale of Santillana”.
"In a nutshell, we believe this news fuel speculation in the targets and are likely to be supportive of the broadcasters’ share price (Impresa) but should weight down on the telecom operators (NOS).”
If confirmed, the acquisition “will likely be disruptive for the market”, since Altice will likely try to “constitute competitive advantages in content and will force the other players to react”. “Consequently, we believe that under this scenario NOS would be forced to reinforce its investment in content and we do not exclude the possibility of Impresa being a target“, BPI adds.
BPI does not believe the acquisition of content companies will grant any more value to the sector, adding they are “sceptic about the strategic value of these assets for the telecom operators”.
“In a nutshell, we believe this news fuel speculation in the targets and are likely to be supportive of the broadcasters’ share price (Impresa) but should weight down on the telecom operators (NOS)”, BPI states. The Portuguese media company Impresa jumped more than 10% (120% in 2017).
According to the research note, Media Capital should be worth between 305 and 555 million euros. Altice confirmed its interest in purchasing the owner of TVI, without mentioning numbers.
Note: The information presented is based on an issuance from the investment bank, meaning it is not a recommendation from ECO. Concerning investment decisions, readers should consult the bank’s complete research note and speak to their financial intermediate.
