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
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map