Defends miVision deal, eyes Alpha TV content
18c cash offer for Multichoice
Lumiere TV Public Co. Ltd. went on the counteroffensive Tuesday after coming under a barrage of criticism following its content management deal with CyTA to move its transmissions to the miVision platform.
LTV Chairman Akis Avraamides called an impromptu press briefing where he warned Antenna and Sigma TV bosses to “back off” from using “unorthodox” methods to thwart the deal.
Avraamides was surprised at the tone of the attacks from the two TV channels and a host of politicians, led by European Democracy MP Prodromos Prodromou, who labelled the LTV/CyTA deal as being “against the ublic interest” and “at the expense of the tax payer”. They also used unfair references such as “scandalous” to frighten the public into believing that CyTA’s wealth was being squandered, he added.
“(Sigma boss) Hadjicostis is attacking the deal because he believes that his political influence will diminish if LTV broadcasts its content through the CyTA miVision network, and because Sigma failed to provide the content that CyTA wanted,” said Avraamides, warning that the days when TV bosses could “elect” or “bring down” governments are over.
He said he was surprised that no politician protested at similar content deals that CyTA signed with Cypriot concerns Axxia and Music Box, or with foreign content providers, yet all hell broke loose when it emerged that CyTA had signed a deal with LTV.
“What’s their problem? Is it because CyTA has done a bad deal or is it because CyTA has made a deal with LTV?”
Asked to comment on the charge that CyTA agreed to pay CYP 165 mln over the next 15 years, Avraamides said the annual cost on LTV for its programming content amounts to CYP 7.5 mln, which over a 15-year period amounts to CYP 113 mln.
“What about the other costs. I can assure you that the deal is beneficial both to LTV and CyTA, which needs content and proper management of its network to be able to survive and prosper.”
He repeated a previous statement made by CyTA Chairman Stavros Kremmos to the Financial Mirror that the LTV/CyTA deal does not exclude others and that it is based on revenue sharing from future subscriber income.
In another development set to add fire to the “war” with the Sigma TV/Dias Group, Avraamides said that in the event that the CyBC content deal with Alpha TV of Greece is broken, “LTV will not allow it to slip away and will clinch it.”
QUADRO PLAY
Avraamides said that the real reason why LTV, as the best content provider, decided to enter into a deal with CyTA for use of its miVision platform is because “hitting the airwaves through satellite for a small country the size of Cyprus does not make economic sense, which is why we need to go through cable or high bandwidth telephone lines.”
He said that LTV was approached and had prospective cooperation talks with all the players in the market including PrimeTel, OTEnet, Cablenet and AthinaSat, but eventually decided to go with CyTA, which as previously reported by the Financial Mirror will soon launch its Quadro Play services of voice, mobile, Internet and data through one line. This will be in direct competition with the likes of PrimeTel and OTEnet, that will soon launch their Triple Play services (excluding mobile).
CyTA is reported to have already brought in the required equipment to commence ADSL+2 linkups, which is the basic requirement to offer Quadro Play services in the future and also overcome its disadvantage of having only 12.000 DSL subscribers and limited geographical DSL presence islandwide.
Avraamides insists that since the LTV/CyTA deal is not exclusive and the miVision platform is open to every content provider, in future more private firms with specialised content will be able to offer their services through miVision and share the revenue with CyTA.
He did not rule out LTV offering a news channel in cooperation with other channels in future through miVision, which he admitted could be one more reason why the traditional channels and politicians with most access to the airwaves were afraid of and opposed the LTV/CyTA deal.
TAKEOVER BID FOR MCC
LTV is preparing to submit a takeover bid, seeking a minimum 40% to maximum 100% control of the CSE-listed Multichoice (MCC). The stock remains suspended pending the outcome of the threat by LTV to dump its stake in the company following the resignation of its three directors and the notice that it will cease to provide its content through the Multichoice platform from 2010 onwards.
LTV is offering MCC shareholders the option to buy their MCC shares at 18c cash (the price prevailing before the suspension), or swap two new shares of LTV for every nine shares of MCC, or a combination of both.
The only restriction is that the bid is valid only in the event that the Competition Commission declares the exclusive deal between LTV and MCC as anti-competitive, thus null and void.
“Following the Competition Commission raid of our offices, with whom we cooperated fully, we received assurances that they will give a timely opinion on our deal with both MCC and CyTA.”
With LTV holding a direct 10.98% stake in MCC, and another 16% through its minority holding in Multichoice Holdings, which in effect is controlled by its former allies, the Dutch NetMed with its own stake in the company, LTV is seeking to mop up the remaining 39% of MCC held by the 15.000 small shareholders, the majority of whom are LTV/Alfa subscribers.
“This is the best exit for the MCC shareholders now stuck in MCC, which has been suspended and has an uncertain future, following our decision to terminate our content agreement in 2010,” said Avraamides.
Flanked by Marios Hadjiyannakis, the Manager of Egnatia Financial Services, advisors to the deal, Avraamides said that LTV, which has secured the Cyprus SEC approval to publish its prospectus, may decide to list its shares only on the CSE, instead of the original plans to seek a dual listing on the CSE and ASE.
Based on the swap ratio of two LTV for every nine MCC, the LTV shares are valued at 81 cents, provided that the deal proceeds since it is subject to the Competition Commission declaring the exclusive deal with MCC as irregular.
