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
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before