Setanta expected to lodge bid for TV3 stake

Setanta, the company that owns the Setanta Sports channel and several sporting rights, is expected to lodge a bid for a major stake in TV3 by Friday, writes Emmet Oliver

UTV is also believed to be preparing a bid.

Both companies were sent a sales prospectus over recent weeks. The 45 per cent stake held by CanWest Global is believed to be worth up to €100 million.

Bids must be submitted by close of business on Friday.

ITV, which already owns 45 per cent, remains in a strong position because it has pre-emption rights on the other 45 per cent stake. This means it must be given an opportunity to match any outsider bidders. The sale is being handled by London-based finance house Hawkpoint Partners.

Setanta, which owns the rights to Scottish premier league football, has previously bid for NTL Ireland, but lost out to UPC.

Investment house Benchmark Capital Europe recently spent more than €30 million taking a stake of up to 32 per cent in Setanta Sports.

Setanta would like to merge its television operations into one Irish station and the purchase of a stake in TV3 could help this. Setanta is also active in European television markets through its US sports channel, North American Sports Network. The company is also believed to be interested in bidding for rights to the English Premiership.

CanWest Global recently announced its intention to sell its 45 per cent stake, saying its TV3 investment was no longer a core interest. ITV plc owns another 45 per cent stake, with Irish investors including U2 manager Paul McGuinness, Windmill Lane shareholder James Morris and accountant Ossie Kilkenny holding the remainder of the shares.

One source this week said: "At this point, ITV is really in control, but others will make their interest known. The position of ITV remains crucial. It holds the rights to a lot of the programming and has pre-emption rights."

ITV has declined to comment.

CanWest's stake is owned by a company registered in Barbados known as CanWest Irish Holdings (Barbados) Inc. It is understood the sales prospectus makes it clear that, while a 45 per cent stake is up for sale, the whole station may be sold if the right offer is made.

Potential buyers are concerned that a programme agreement ITV has with TV3 may be withdrawn in the years following the sale of the CanWest stake. Under this agreement, some of TV3's leading programmes are supplied by Granada, a subsidiary of ITV plc. Among them are top ratings winners like long-running soap operas Coronation Street and Emmerdale Farm.

Head of investment strategy at Bloxham Stockbrokers, Pramit Ghose, said recently a bid by UTV made sense.

"A successful bid could allow UTV to buy its way out of its current television earnings plateau, as Irish television continues to outperform the broader advertising market," Mr Ghose said.