Looks like it’s seconds away, round two, in the great Polish cable consolidation contest.
The first round, involving Liberty Global’s UPC Polska, its take-over target Aster and the competition authority UOKiK took the best part of a year and was far from straightforward. Indeed, there was a time when it looked as if the deal, worth €217.6 million at December 2010 prices, would not be approved. In the event, UPC Polska had to compromise – some would argue in a big way – by agreeing to the UOKiK’s demands of selling on some of its newly acquired assets to independent third parties.
The deal was a particularly bitter pill for Vectra, Poland’s second largest cable operator, to swallow. It, too, had been in negotiations to buy Aster and made the fact public just as soon as UPC Polska announced the acquisition in December 2010.
It is also clear that the UOKiK was unhappy with the way UPC Polska conducted itself during the subsequent investigation into the deal and has this week fined the operator just over €175,000 for effectively concealing the truth.
Which now brings us on to what will probably be the sale of Multimedia Polska. Although proceedings are still at a very stage – all we know is that JP Morgan has been chosen to act as advisors – it is likely to attract huge interest, with UPC Polska and Vectra again the frontrunners.
Multimedia Polska has been around for many years, having been established in 1991, and shares many of the same characteristics as Vectra, including a similar history that saw it grow from a regional into a national player. Talk about a possible deal between the two has in fact been doing the rounds for a number of years and could now be closer to becoming reality.
A combined Multimedia/Vectra operation would have in the region of 1.5 million subscribers, or a similar number to UPC Polska/Aster, and effectively create a near-duopoly situation, with leading smaller companies such as Toya and Inea effectively relegated to the role of bit part players.
However, should UPC Polska take over Multimedia Polska it would have just over 2 million subscribers and further strengthen its market leadership, with a share of 40-45%.
There will, of course, be other interested parties in any possible sale, such as the incumbent telco TPSA.
For its part, Multimedia Polska issued a statement on February 8 confirming that it had indeed appointed JP Morgan to look at various strategic options for the company’s future. These include retaining its current ownership structure.
The next few months are likely to be some of the most interesting in Multimedia Polska’s long history.
