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Spanish telecoms group Telefonica buys stake in Mediaset

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Spanish telecoms group Telefonica buys stake in Mediaset

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Spanish telecoms group Telefonica has agreed to buy an 11.1 percent stake in Mediaset, the Italian pay-TV business of Silvio Berlusconi, for 100 million euros.

The deal comes just days after Telefonica bought Mediaset Espana’s 22 percent stake in Canal Plus.

The move led to a hike in Mediaset shares, which shot up four percent on opening in Milan on Monday.

Mediaset said it would transfer its pay-TV activities to a new company which will have an equity value of 900 million euros.

Analysts believe the valuation to be high, given persistent uncertainties over future profitability because of the rising cost of TV rights for soccer.