Rupert Murdoch’s News Corp may back out of a deal that would see it become the dominant pay-TV operator in Italy, according to a report in today’s Financial Times.
News Corp is all set to acquire Italian pay-TV business Telepiù from Vivendi Universal and merge it into its own pay-TV operation Stream (see
News Corp Set To Take Telepi). The E1.5 billion deal would see Rupert Murdoch’s media empire become the sole pay-TV operator in Italy.
The FT today reports that Murdoch is now close to pulling out of the deal after failing to find sufficient interest from investors. Telepiù is reported to be costing Vivendi up to E1 million per day; analysts have said that a merger or closure of either Telepiù or Stream is inevitable if they are ever to reach profitability.
According to today’s report, Murdoch hoped to find financial backing for half of the venture, but has failed to do so. Telecom Italia, which 50%-owns Stream, is thought to be reluctant to increase its stake in the merged entity to around 20%.
Analysts at ABN Amro say that if the deal does collapse, News Corp will be faced with either shutting down Stream or continuing in unprofitable competition with Telepiù; Vivendi will be left in a similar predicament.
