US-based Carlyle has broadcaster TV3 in frame for takeover
Published 17/04/2015 | 02:30
Buyout fund Carlyle is reported to be eyeing up a possible takeover offer for Irish broadcaster TV3.
US based Carlyle is an active player in the market, having teamed up with Irish fund Cardinal for a number of recent deals here, including the acquisition of Carroll Cuisine.
The US private equity giant is now tipped as a possible buyer of TV3 from Doughty Hanson, a rival private equity firm that currently owns the company behind broadcaster TV3, the recently launched TV3+1 and 3e.
It is understood the two companies have discussed a potential deal, though any transaction is uncertain and could be some way off. Sky News said Carlyle was one of a number of firms to have held talks with Doughty Hanson.
Liberty Global, which owns UPC has also been tipped as a possible buyer for TV3 and bid speculation may now flush out other potential challengers.
US media giant Viacom, whose brands include MTV, Comedy Central and Nickelodeon, was said to interested in TV3 at one point, but is now thought to not be in the running. Carlyle Group is one of the world's biggest investment firms with close to $200bn in assets under its control.
Doughty Hanson has owned TV3 since 2006 but speculation about the future of the stake in the Irish TV station and about the private equity firm's other interests has mounted after an announcement this week that the European private equity firm was dropping a fundraising effort aimed at raising cash to buy companies, and would instead focus on its remaining portfolio.
"As a result of the continuing uncertainty for both employees and investors regarding the fund raising process, the decision has been taken by the Board of Doughty Hanson to no longer pursue its current fund raising efforts," the company said.
The firm had been trying to raise capital for its sixth fund, but will now try to "maximise the value" of its remaining companies.
The most common way for a private equity house to maximise value is by selling businesses.
Doughty Hanson funded its TV3 takeover with loans from Anglo Irish Bank. In 2010 the then Irish Bank Resolution Corp (IBRC) agreed a restructuring deal to ease the terms on a share of the debt.
Then, in 2013 Doughty Hanson bought back the TV3 debt when they were put up for sale by the liquidators of IBRC, effectively allowing the business to cancel its own loans.
Accounts for TV3 show it returned to profit after that deal, helped by an exceptional gain of €8.9m that resulted from the redemption of the loans.
TV3 held the only independent licence to broadcast television nationally when Doughty Hanson bought the business from a group led by Canadian broadcaster CanWest.
The broadcaster now faces a significant challenge from the new UTV Ireland station which has the Irish rights to former TV3 mainstays Coronation Street and Emmerdale.
TV3 bosses have indicated that they expect revenue and profitability to grow this year, despite the challenge from UTV Ireland.
But, TV3 has seen its market share dip 2pc to 10.6pc in the first three months of its rival's existence, Nielsen figures show.
UTV pulled in almost 6pc of the audience, with RTE's share also falling by around 2pc.
Exclusive rights to the Rugby World Cup and the X Factor in Ireland will help TV3 to hold its own this year.
The company is also bumping up its output of home grown content.