Eir in talks for takeover of Setanta Sports
Partner BT said to be ‘comfortable’ with a deal for broadcaster
Mickey O’Rourke, the majority shareholder and co-founder of Setanta Sports. Photograph: Eric Luke
The Irish Times has learned that talks are at an advanced stage with a deal likely to be completed in 2016, subject to regulatory approval and competition clearance.
It is understood that Mickey O’Rourke, Setanta’s majority shareholder and co-founder, would remain with the business for a period after a deal is completed.
Setanta operates two sports channels in Ireland and has hi-tech production facilities in Dublin’s city centre.
Last week it signed a “multi-year” extension to its current deal with British telco BT, which was due to expire in 2016.
This allows its customers to receive BT’s sports channels as part of their Setanta pack.
It is understood that BT is aware of the discussions taking place with Eir and is comfortable with a deal being agreed.
No comment was available from either Setanta, Mr O’Rourke or Eir, which was known until recently as Eircom.
This is part of an ambitious move by Eir to acquire content for its Eir Vision TV platform and to bolster its competitive position against rival cable TV and broadband provider Virgin Media, which is owned by American businessman John Malone.
Mr Malone also controls a 9.9 per cent stake in Britain’s ITV, which itself is set to buy the TV assets of Belfast-based UTV.
This deal will be seen as a move by Eir’s board to bolster its business offering in advance of either another attempt to list on the stock market or a possible trade sale.
The company pulled a €3 billion flotation last year but is expected to look at this option again, possibly in 2016, as it seeks a liquidity event for its owners.
For Setanta, a deal would secure its long-term future, although possibly under the Eir brand. It gives it added financial firepower to secure sports rights and to enhance the quality of its productions.
It is not clear how much Eir would pay to acquire Setanta but industry sources said the company could be worth up to €20 million.
The sale will yield a windfall for staff, who own 5 to 10 per cent between them.
It will also benefit former shareholders Leonard Ryan, Mark O’Meara and music promoter Denis Desmond who sold their interests in the business to Mr O’Rourke in recent years via vendor loans.
In an interview with The Irish Times in March, Mr O’Rourke said its annual revenues are about €30 million and it had “well over” 100,000 subscribers in Ireland, across various platforms.
Setanta made a “small profit” in 2014 and would do the same this year in spite of a €4 million investment in the business, he added.
Mr O’Rourke will retain ownership of Premier Sports in the UK and Setanta’s Eurasia channel, which broadcasts in Kazakhstan.
He has other business interests via an investment vehicle called Danu Partners, which he runs with Mr Ryan and Mr O’Meara.