5 of TF1 and become sole master on his group

Loss of speed in his profession of "chain leader" heart of PAF, TF1 accelerates market enabling the mini-généralistes of digital terrestrial television (DTT). The group, chaired by Nonce Paolini, announced yesterday entered into exclusive negotiations with the AB to him buy his 40 in TMC and 100 of the NT1, all string with EUR 192 million. The operation, submitted yesterday to the committees of business of the two groups, will have to be authorized by the Conseil supérieur de l'audiovisuel (CSA) and the competition authority. A procedure that, already, looks difficult in view of the opposition that this operation is already among the other audiovisual groups (see below).

Optimistic, TF1 hope all will loop by the end of the year. On the other hand, TF1 will remain shareholders in the amount of one third of the capital of the AB group which will lose its two main channels, but has granted an option to purchase in Claude Berda, pattern and majority shareholder of the AB group. Within two years, he may, subject to 155 million, redeem the 33.5 of TF1 and become sole master on his group. The operation is very favourable for the AB group. It is also for TF1, which puts the hand on two channels free DTT lighthouses: with 2.4 share of hearing in April, TMC is the leader with W9, the subsidiary of M6, with new entrants and NT1 ranks fifth (1.3). Despite a decrease of 1.9 of the TF1 yesterday on the stock market action where all media values have been left behind indeed the operation was hailed by analysts. "TF1 bought the only asset it was interested in AB, its two strings in the TNT", one of them said. And the two strings are cost-effective: TMC has identified an operating profit of EUR 14 million in 2008 (about 30 of operating margin) and NT1, small deficit last year (2.5 million in operating losses) will profit this year.

Offensive step

Highly anticipated, the operation is structuring for TF1, for which the free TNT became more that priority in a context of declining of the hearing of the flagship of the Group (25.2 last week, 26.3 in April) and advertising slump without precedent. This had not been always been the case. At the launch of the TNT in the early 2000s, Patrick Le Lay, former Chief Executive of the group, had scrapped firmly against this new television. Since then, the undeniable success of the TNT, launched in March 2005, forced TF1 review its strategy, the group being very criticized for the delay in this area. Finalized in the spring of 2007, the equity participation, for a third of the capital, TF1 in the AB group was a significant first step. Presented as defensive, this operation helped TF1 "secure" AB and two nuggets, TMC and NT1. After discussions with Claude Berda lasted, the boss and majority shareholder of AB that sell all of its business. But for TF1, it was not question to retrieve a group whose activities range from publishing of thematic channels (RTL9, XXL...) the operation of a bouquet of satellite television by the management of a vast catalogue of series.

The complete redemption of TMC, including the Principality of Monaco guard 20 of the capital, and NT1 marks the second stage, more offensive for TF1. The third step will occur in 2011, with the extinction of the distribution of analogue television. TF1, M6 and Canal , will collect a channel "bonus" DTT with a new free channel. The group will then four channels on the DTT free and will be a heavyweight, find the place in the world of before, that of the analog where place of leader, today challenged, had never been called into question. Remains to be seen what to feel the CSA and the competition authority...