UPDATE 1-Vivendi, TVN combine Polish pay-TV operations
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UPDATE 1-Vivendi, TVN combine Polish pay-TV operations

www.reuters.com   | 19.12.2011.

* Vivendi to control merged pay-TV businesses, worth PLN 5.9 bln
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* TVN sees the joint pay-TV EBITDA at PLN 550 mln in 2015

* Vivendi pays 230 mln euros for 40 pct in TVN's controlling owner

WARSAW, Dec 19 (Reuters) - Vivendi and Polish broadcaster TVN agreed on Monday to combine their pay-TV operations in Poland as part of a wider partnership deal that could see the French media and telecoms group ultimately take control of TVN.

Vivendi's Canal+, which controls Poland's No. 2 satellite TV operator Cyfra+, will take a 51 percent state in the new joint venture valued at 5.94 billion zlotys ($1.7 billion).

TVN will hold a 32 percent stake, while Canal+ partner in Cyfra+, Liberty Global's unit UPC, will hold the remaining 17 percent.

TVN said the companies expect the combination to bring in annual savings of more than 250 million zlotys in its third year with a core profit EBITDA of 550 million and 3 million clients in 2015.

Vivendi's Cyfra+ and TVN's 'n' platforms have struggled to gain ground in the saturated Polish market dominated by a local player, Cyfrowy Polsat, which has 3.5 million customers.

"The Polish pay-TV market is fragmented and fiercely competitive as compared to other European markets," TVN said.

"The combination of Cyfra+ and 'n' represents an attractive opportunity to consolidate this market further, and will create the leading premium Pay-TV operator, with 2.5 million customers," it said.

Under an agreement with TVN's controlling shareholder ITI Group, Vivendi will also take a 40 percent in ITI's holding company N-Vision that has 51 percent of TVN for around 230 million euros ($300 million).

Shares in TVN jumped 5.8 percent to 9.60 zlotys by 0745 GMT.

"According to my calculations, Canal+ is paying 14.7 zlotys per TVN share," said KBC analyst, Piotr Janik. "That is a big premium and may be positively affecting TVN market value."

The French group also has an option to buy the rest of N-Vision after three years, with TVN also holding an option to exit the joint pay-TV business in three to four years.

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