|
Murdoch drops Italian bid
|
 |
March 20, 1998: 6:55 p.m. ET
Negotiations to buy Mediaset fail after Berlusconi refuses to lower price
|
NEW YORK (CNNfn) - Media mogul Rupert Murdoch has broken off acquisition talks with former Italian Prime Minister Silvio Berlusconi about buying his Italian television and advertising firm Mediaset.
Murdoch, through his British Sky Broadcasting, was seeking a controlling stake in the company, but sources familiar with the talks say the negotiations broke down because Berlusconi wanted 7 trillion lire, or $3.8 billion -- substantially higher than Murdoch's latest offer of 5.8 trillion lire, or $3.2 billion.
According to the Italian newspaper Corriere della Sera, News Corp. chief Murdoch met with Berlusconi in northern Italy this week and Murdoch made a "take it or leave it" offer for the majority interest.
Mediaset is Italy's largest private broadcaster and is controlled by Berlusconi through his holding company, Fininvest. Berlusconi built Mediaset from a single channel to its current three and is an equal competitor with state-owned broadcaster RAI.
Murdoch was negotiating to buy Mediaset through UK pay television company BSkyB because Italian law prohibits non-European Union companies from owning controlling stakes in media groups.
In 1995, Berlusconi decided on a public offering on the stock market instead of taking Murdoch up on an offer to buy a majority stake of Mediaset.
Mediaset has plans for an Italian digital TV satellite service with five partners -- Telepiu, Mediaset, RAI, Telecom Italia and Cecchi Gori Communications.
Those television plans received some static last week from the European Commission, the competition watchdog of the European Union.
European Competition Commissioner Karel Van Miert's deputy sent a letter to the Italian government last week warning the that the project would lead to a "substantial impediment" to competition in the nascent pay television market.
A deal with Mediaset would have given Murdoch a foothold in an area that has thus far eluded him. He has forged News Corp. out of a variety of alliances and acquisitions, and has television channels in the United States, the United Kingdom and in Asia. However, he has yet to set up shop on continental Europe.
Murdoch scored something of a home run Thursday when he received approval of Major League Baseball owners for his $350 million purchase of the Los Angeles Dodgers. 
-- from staff and wire reports
|
|
|
|
|
 |
|
