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France Telecom nets E1.6bn for TDF stake

A consortium of European private equity firms has stepped in to acquire the French conglomerate’s 64 per cent interest in the French broadcaster, which also marks Hutton Collins' debut transaction.

France Telecom has taken a step towards reducing its E63bn debt pile with the sale of a majority stake in its Télédiffusion de France broadcasting division to Charterhouse Development Capital, CDC IXIS Equity Capital and the financial group Caisse des Dépôts.

The total price for TDF is E1.9bn, of which France Telecom will pay E250m for a 36 per cent stake in the holding company set up to acquire the broadcaster, giving France Telecom a net total return of E1.6bn. 45 per cent of the business will be held by Charterhouse Capital Development (approx. 35 per cent) and CDC IXIS Equity Capital, with the remaining 19 per cent controlled by Caisse des Dépôts. The total package for TDF is thought to be in the region of E2.9bn.

Mezzanine financing of E300m was co-arranged by Royal Bank of Scotland and Hutton Collins, which marked the firm's debut investment following the launch of its E600m mezzanine fund earlier this year.

TDF, which provides broadcast services for radio and TV channels, as well as services for wireless telephone operators, is currently undertaking a number of acquisitions across Europe. The firm has operations in Finland, through its 49 per cent stake in Digita, Finland's largest broadcasting network, and in Spain, where its interests are held by Medialatina, a wholly-owned subsidiary. The firm is also in the process of rolling out its digital television network in France. The TDF assets being divested represented 2001 consolidated revenues of approximately E780m and EBITDA of about E250m.

France Telecom said the investment made by the new shareholders will give TDF access to the financial resources needed to seize growth opportunities created by the advent of digital terrestrial television, outsourcing of wireless telephony infrastructures and the deployment of UMTS, as well as international development opportunities.