By Paul Sharma
LONDON (Dow Jones)-Given that M&A levels tend to be
pro-cyclical, it would be fair to expect increased takeover
activity in the European media sector this year as it has risen 19%
in twelve months, outperforming the broader index of stocks by
6%.
The general expectation among sell-side analysts is for the
major players in the sector to continue to do smaller bolt-on
deals, along the lines of United Business Media's (UBM.LN) purchase
of Canon Communications in September last year.
On the whole, the sell-side has been reluctant to name takeover
names, but that said, there have been a few companies which have
been mentioned in dispatches.
JP Morgan analysts suggest online estate agent Rightmove PLC
(RMV.LN), advertising agency Aegis Group PLC (AGS.LN) and serial
takeover target, Informa PLC (INF.LN) could be taken out. They also
point out that Trinity Mirror PLC (TNI.LN) and Mecom Group PLC
(MEC.LN) have been the subject of merger speculation.
Credit Suisse meanwhile think private equity could become more
involved in the sector, and suggest that UBM, which so far has been
known as an acquirer, could become a target for private equity
groups. Online comparison company Moneysupermarket.com Group PLC
(MONY.LN) is also flagged as a potential private equity target.
As an aside, in their 'potential surprise' list for 2011,
Deutsche Bank posits the idea that UBM could sell its PRNewswire
asset. Other possible upsets for this year include Daily Mail and
General Trust PLC (DMGT.LN) selling Northcliffe to Trinity Mirror
or Johnston Press PLC (JPR.LN).
In the broadcast space, there are two deals sparking interest.
Credit Suisse says that in Spain Antena 3 de Television SA
(A3TV.MC) and La Sexta "are likely to eventually find enough common
ground to agree a merger, which would take the number of players
down to two." The other deal being tipped comes from Deutsche Bank,
which notes that ProSiebenSat.1 Media AG (PSM.XE) could sell its
Scandinavian and Benelux assets.
(Paul Sharma is a columnist for Dow Jones Investment Banker on
the telecommunications, media and technology sectors. He has 20
years of telecoms industry experience, working as an analyst and in
industry. He can be reached at +44 20 7842 9463 or by email:
paul.sharma@dowjones.com)