Murdoch pursues Italian television

Rupert Murdoch's News Corp is bidding to buy a controlling interest in the besieged television empire of the Italian media magnate-turned-politician Silvio Berlusconi, Mr Murdoch's lawyers said yesterday. The move follows hot on the heels of a joint-venture deal with MCI, the US telecommunications giant.

The Italian financial daily Il Sole-24 Ore put the likely bid price at $2.8bn, considerably less than the $4.6bn Fininvest and its advisers say the stake is worth, but this figure could not be confirmed.

News Corp refused to comment officially, but a senior executive said: "We are looking at it." Fininvest said offers would be looked at on their merits.

According to one of Mr Murdoch's Italian lawyers, Marino Bastianini of the legal firm Carnelutti, News Corp is bidding to take control of 51 per cent of Mr Berlusconi's three national networks and his television advertising company, Publitalia, with an option to take over the remaining 49 per cent if fast-evolving rules on media ownership in Italy permit.

Mr Bastianini said he expected Mr Berlusconi's holding company, Fininvest, to give an initial response "in the next few days" so both sides could discuss the nuts and bolts of the deal, notably the price Mr Murdoch would be willing to pay.

"The price is yet to be set, and would of course depend on the likely political and legal restraints," Mr Bastianini said. "But if all goes well, we would hope to have a contract signed in the next few weeks."

News Corp has about $1bn cash on hand, and expects to receive up to $2bn from MCI, which is to get a 13.5 per cent share of News Corp in exchange. MCI, 20 per cent owned by British Telecommunications, has said the News Corp link gives it a window on global television, including Mr Murdoch's Fox network and satellite broadcaster BSkyB.

Mr Berlusconi has been casting around for possible buyers for his television empire because a series of referendums scheduled for next month risk upsetting his monopoly position in the private sector. The call for the referendum is directly linked to the waning of his political fortunes following his resignation as Prime Minister last December.

In building his media empire 15 years ago, Mr Berlusconi sidestepped domestic restrictions by initially beaming programming into Italy from Monte Carlo, a strategy followed by Mr Murdoch when he used a Luxembourg base to broadcast Sky TV in the UK.

In the run-up to national elections last year, Mr Berlusconi was heavily promoted as a political candidate on his television stations. The anomaly of a senior politician dominating private broadcasting sparked the call for the referendums.

Unless a political compromise can be worked out in the meantime, voters will be asked four questions on 11 June of direct relevance to Mr Berlusconi's business fortunes. The most important is whether Mr Berlusconi should be allowed to keep all three of his channels, or whether he should be forced to sell up to two of them.

Mr Berlusconi's awkward position has prompted inquiries from several media tycoons in addition to Mr Murdoch. But it is far from clear what benefit foreign investors could hope to gain from the situation, since any restrictions on media ownership would apply to them as much as they would to Mr Berlusconi.

According to Mr Bastianini, Mr Murdoch would hope to conclude his deal before the referendums take place, thereby gambling his commercial future in Italy on their outcome. "Obviously, he will be drawing up various scenarios and establishing his negotiating position accordingly," Mr Bastianini said.

Mr Berlusconi's television stations are dominated by dubbed American imports, buxom women and cheap and cheesy game shows. Until a buyer performs due diligence, it is not clear how profitable the holdings are, nor how labyrinthine Mr Berlusconi's financing arrangements might be.

Mr Berlusconi had sounded lukewarm about the possibility of selling his television stations to a foreigner, trying to stir up patriotic feelings to push voters on to his side in the referendums.

He had also apparently ruled out selling off his television stations one by one. Fininvest has proposed lumping its three network channels - Retequattro, Canale 5 and Italia 1 - plus Publitalia together into a single company, which would then be floated on the open market. Clearly, the hope was that Mr Berlusconi would remain the biggest shareholder and so continue to be able to exercise some control.

But Mr Murdoch, according to Mr Bastianini, does not simply wish to buy into Italian private television; he wants to take it over. He is believed to be holding out for nothing less than a majority stake.

Comment, page 17

Start your day with The Independent, sign up for daily news emails
Sport
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Life and Style
Mark's crab tarts are just the right size
food + drinkMark Hix cooks up some snacks that pack a punch
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect