BSkyB's European partners label its statement `premature'

MATHEW HORSMAN

Media Editor

The satellite broadcaster BSkyB was "premature" in announcing on Wednesday a $270m investment in the German pay TV market, its two Continental partners, Bertelsmann and Canal Plus, said yesterday.

Confirming that a pan-European pay TV alliance involving the three companies, and including Havas, the French media company, had been agreed, both Canal Plus and Bertelsmann cautioned yesterday that BSkyB's investment in Premiere, the German pay-TV channel they share with the media giant Kirch, had yet to be finalised.

"The announcement in London was premature," Laurent Perpere, finance director at Canal Plus, said. "Any change in Premiere's ownership requires that we discuss it with all the partners," including Kirch, which is believed to be resisting the addition of BSkyB to the venture.

He added, however, that there were "legal methods" that could allow a Premiere deal to go through without the support of Kirch. According to informed sources in London, Canal Plus, Bertelsmann and BSkyB have already agreed such methods, which lawyers advise could allow the deal to proceed without Kirch's support.

Yesteray's confusion was rooted in a raging battle between Kirch and Bertelsmann over digital TV technology, with the two companies backing different set-top boxes. Kirch has developed its own decoder for digital TV signals, and is fighting to ensure that it is accepted as the standard in Germany.

Bertelsmann prefers the Seca standard developed by Canal Plus, which will be adopted by the new BSkyB-Canal Plus-Bertelsmann alliance.

BSkyB shares rose sharply in London, gaining 24p to 423p. Canal Plus shares, which had been suspended on Wednesday pending the announcement, gained 16 per cent in heavy trading.