Comcast/Sky have Canal+ in their sights

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Brian Roberts, CEO at Comcast – and arguably one of the most powerful figures in UK broadcasting – speaking at an advertising industry event in London last week, praised Sky and in a major feature in the Sunday Telegraph newspaper there was much comment about the next step for the entertainment giant.

One option, according to the newspaper’s “sources”, is to acquire Canal Plus. The newspaper said: “If we had an option to get into France at scale that would be great.”

However, this is by no means the first time that Sky has tried to expand its influence into France. In January 1999 Rupert Murdoch proposed a merger between BSkyB and Canal Plus. Murdoch and Canal+ boss Pierre Lescure held three meetings before deciding that the deal was going to be a challenge too far.

This latest story provoked a report by Laurie Davison, media analyst at Deutsche Bank, who suggested that the Canal+ story might have slipped by many clients, and the bank’s report says that Canal+ is seen as a M&A target.

“This again highlights the potential value of Canal+, an asset which has attracted investor scepticism, but we see as a leading M&A target. It has the largest content asset in Europe with a 33 per cent stake in the newly merged Banijay-Endemol Shine entity & Studio Canal; the largest film distributor and film catalogues in Europe. It offers a subscriber base of 5 million in France and 11 million across Africa, Poland and French overseas territories. The Comcast takeout of Sky, the TDC bid for MTG Nordics, the AT&T acquisitions of Time Warner & DirecTV have shown that, despite structural headwinds to video subs from Netflix & streaming, there is still huge value in incumbent pay-TV assets,” says the bank.

The bank issues a caution, however. “While Comcast is still integrating Sky and may be wary of further acquisitions without top-line growth, a merged Sky/Canal+ would provide a strong tech & content to take NOW TV into new markets (Spain, Benelux, Nordics), a deal would likely be accretive and Comcast’s set-top box expertise could enable Canal+ to bypass French telcos by going OTT. Canal has had interest before, from Orange, seeking to buy a stake in 2017 and we expect Bollore would willingly sell at a compelling price.”


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