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MTG sells Bulgaria’s Nova Group at €185m valuation

MTG has agreed to sell its 95% shareholding in Bulgaria’s Nova Broadcasting Group to Advance Media Group in a deal that values the full business at €185 million (SEK 1,917 million).

Jørgen Lindemann

MTG said it would use the proceeds of the deal to develop its digital entertainment verticals via organic investment in mergers and acquisitions, with the sale to result in a net capital gain of approximately SEK 1,300 million.

Nova is a commercial media group that comprises seven TV channels and complementary online businesses. MTG says that these reach 74% of the Bulgarian population on average every month. Nova generated SEK 1,154 million of sales and SEK 223 million of operating income (EBIT) for full year 2018 and employs 650 people.

Advance Media Group is a subsidiary of Advance Properties OOD, a Bulgaria-based business that owns 117 companies across 23 countries. Its portfolio of businesses operate in more than 10 industries including pharmaceuticals, shipping, port operation, real estate and power generation. The group is jointly owned by Bulgarian businessmen Kiril Domuschiev and Georgi Domuschiev.

“This deal with Advance Media Group will ensure the continued development of Nova, which CEO Didier Stoessel and his team have grown into Bulgaria’s leading commercial media group,” said MTG president and CEO, Jørgen Madsen Lindemann.

“This transaction is in line with our strategic decision to find new owners to invest in our international entertainment operations, while we focus on our global digital verticals. Following the forthcoming distribution of NENT Group, MTG will be a standalone strategic operational and investment holding company focused on eSports and online gaming.”

MTG announced at the start of the year that it had entered discussions with other potential buyers for Nova Broadcasting Group, after Bulgaria’s competition regulator blocked the planned sale of the company to PPF Group last year.

In a January statement, MTG said its previously-announced deal to sell its 95% shareholding in Nova to the investment company controlled by Czech billionaire and businessman Petr Kellner had been terminated.

The deal, which had also valued the Bulgarian commercial media group at €185 million (SEK 1.83 billion), was blocked by the Commission on Protection of Competition in July 2018 over fears that it could reduce competition in the media and advertising market.

MTG first entered Bulgaria in 2007 by investing in Balkan Media Group Limited, and then acquired Nova in 2008 before merging the two businesses in 2009. The Advance Media Group deal is expected to close during the second quarter subject to regulatory approval.

The Nova deal is the latest in a string of divestments by MTG in the traditional TV space. In early 2018 MTG agreed to sell its 75% stake in youth broadcaster Trace in a deal that valued 100% of the business at €40 million. In 2017 it also sold its Czech TV assets for €116 million and its Baltic broadcasting business for €100 million.