Cyfrowy Polsat to buy parent broadcaster

Polish DTH platform Cyfrowy Polsat is to buy its parent company, commercial broadcast group Polsat, for PLN3.75 billion (€945 million). Cyfrowy Polsat will pay PLN2.6 billion in cash and the remainder in the form of 80 million new shares valued at PLN14.37 each.

The new entity is expected to be the biggest media company in the country when the deal closes next year. The transaction will be conditional on the pay TV operator organising up to PLN2.6 billion of debt financing.

To help fund the transaction, which is expected to close next March, Cyfrowy Polsat will not pay a dividend this year, CEO Dominik Libicki told local press.

The move will reportedly allow Polsat owner Zygmunt Solorz-Zak to focus on expanding in the telecom sector.

The news came as Cyfrowy Polsat posted a third-quarter net profit of PLN68.4 million, below analysts’ expectations. The company posted revenues of PLN363.6 million, up from PLN313.8 million for the same period last year.

The company had 3,277,936 subscribers at the end of September, up 12.4%, with ARPU of PLN35.50, up 3.5%. Churn was however up by 2.2 percentage points to 10.2%, while subscriber acquisition costs rose by 29% year-on-year to PLN145.60 due to increased after-sales provisions. The company said it expected to see a benefit from this as subscribers remained on premium packages after the end of free-of-charge introductory periods.