Discovery could take over Eurosport in wide-ranging deal with TF1

Discovery Communications could take full control of Eurosport under the terms of a deal now being finalised with France’s TF1.

TF1’s board has authorised CEO Nonce Paolini to go ahead and complete negotiations with Discovery that could see the US factual channel provider take a 20% stake in Eurosport International and Eurosport France for €221.6 million.

Under the terms of the deal Discovery will have the option to increase its stake to 51%. If Discovery takes this option, TF1 will also have the option to sell the remaining 49%, giving the US group 100% control.

According to BNP Paribas, the deal values Eurosport at €850 million or about 12 times expected earnings before interest and taxation for 2013, notably higher than existing estimates of the channel’s worth.
TF1 and Discovery also plan to collaborate in developing a portfolio of thematic channels covering areas including documentaries and magazine programming for the French market. Discovery has the option to become a shareholder in TF1’s existing channels Breizh, Histoire, Ushuaïa TV and Stylía up to a threshold of 20% in a €14 million deal, with the option to take its stake up to 49% after two years.
Discovery and TF1 will also collaborate in the production of documentary and magazine programming via TF1’s production arm.