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LONDON/AMSTERDAM - Endemol shares spiked up 12 per cent briefly after a report that media tycoon Rupert Murdoch wanted Telefonica's 75 per cent stake in the company that makes the Big Brother reality TV show.
Murdoch's name was touted on Tuesday by Spanish newspaper La Gaceta, a day after it ran a story saying US giant Disney had formed an alliance with Dutch media mogul John de Mol, who founded Endemol, to buy Telefonica's stake.
However, a spokesman for Murdoch's News Corp said the company had no interest in buying Telefonica's stake and called such speculation "nonsense".
A source close to Disney told Reuters on Tuesday that the global entertainment conglomerate was also not involved.
"We are not interested in it," said the source, referring to Telefonica's stake, which is expected to be sold within months.
Spain's La Gaceta said Murdoch, who controls News Corp., would buy Telefonica's stake alone, giving no more details and citing no sources. Telefonica declined comment.
Speculation about a possible buyer has focused on private equity and media players with a global reach who could inject Endemol's television content into their own channels.
Spanish media group Vocento, Sony Entertainment and Time Warner were also named last year as being interested in Endemol.
Amsterdam-based Kempen analyst Oskar Tijs said it made sense for big media conglomerates to look at Endemol, which has a market value of around 2.6 billion euros ($4.90 billion).
"They are market leader. They have a proven track record in building valuable formats, top formats. There is rationale to look at this deal," he said.
Regarding private equity interest, Tijs said: "I think it's quite expensive for them. It depends on your assumptions how you can get out again; in three years it can all look different."
Endemol-related bid speculation coincides with widespread criticism over Endemol's Celebrity Big Brother show, which has been at the centre of a row in Britain and India over alleged racism and bullying by contestants on the show.
Peter Bazalgette, Endemol's chief creative content officer, has been flagged in recent UK newspaper reports as someone who might also lead a management buyout of the company.
Bazalgette has not commented directly on this, though at a media summit presentation in London on Thursday, he said businesses had to adapt quickly to changes in how, when and where consumers wanted to see television content.
"There are tremendous opportunities for many of us in content, not only to create content specifically for new platforms, but also to aggregate and distribute it," he said.
Bazalgette said such changes meant media content creators could conform not just to the roles of terrestrial broadcasters but start to perform some of the roles for businesses like British telecoms group BT and Dutch telecoms group KPN, among others.
Any move by Bazalgette to lead a management buyout would be problematic as it would require him to leave Endemol's board, something he has not indicated any desire to do.
Big Brother has served Endemol well in recent years via its formats around the world and contributes about 20 per cent of the company's 900 million euro annual revenue.
JP Morgan analyst Mark O'Donnell, who follows Endemol, said he was not surprised to see Murdoch and Disney's name in the frame, given they own the Fox and ABC networks, respectively.
"It is kind of a natural assumption that if you believed Disney was interested and going to scoop up Deal or No Deal, Big Brother, Extreme Makeover, Home Addition and Fear Factor -- all very successful formats in the US -- and put them on ABC, that you would have interest from your competitors," O'Donnell said.
By 1551 GMT, Endemol shares were up 1.5 per cent at 20.63 euros, surrendering their earlier year high at 22.74 euros.
The shares have more than doubled since Endemol's November 2005 listing on the Amsterdam stock exchange.
Kempen's Tijs said just months ago a buyer was not expected to pay more than 15 euros per share.
De Mol, who founded Endemol with producer Joop van den Ende in 1994 and sold it to Telefonica in 2000, told Reuters in September that he had been approached by Italy's Mediaset to form a consortium to buy a stake in Endemol.
A spokesman for De Mol, who has a 5.15 per cent stake in Endemol, has declined to comment on the stake bid speculation.
Endemol's Chief Financial Officer Jan Peter Kerstens said in an interview with Reuters in September that the company would prefer not to be owned by a broadcaster so as not to strain relations with existing clients.
- REUTERS
