MTG’s Nova sale blocked in Bulgaria

Nordic entertainment outfit Modern Times Group (MTG) has been dealt a blow in its bid to realign its operations after having the €185m (US$229m) sale of Nova Broadcasting Group blocked by Bulgaria’s competition authorities.

Petr Kellner

MTG revealed plans earlier this year to sell its 95% stake in Nova to PPF Group, the investment company controlled by Czech businessman Petr Kellner.

The Nordic company, which has split into two parts and has been selling off swathes of its broadcast operations in Russia and CEE, said the proceeds would be used to invest in its Nordic entertainment, studios and global digital entertainment businesses.

The sale had been agreed with PPF but remained subject to regulatory approval, which has not been granted.

Bulgaria’s competition authority, the CPC, claimed the deal would affect competition and give PPF a significant advantage. However, it is believed PPF has no other media businesses operating in the country, prompting some to suggest the decision has been made on political grounds.

In a statement, MTG said it “notes today’s decision by the Bulgarian Commission for Protection of Competition to disallow the proposed sale, announced on February 19, of MTG’s shareholding in Nova Broadcasting Group in Bulgaria to PPF Group.”

The Stockholm-based company admitted it was “surprised by the decision,” adding it “will review it further before deciding on the next steps to be taken.”

The planned sale had been part of MTG’s ongoing strategy of selling off its TV assets and focusing on digital entertainment, a plan that has so far seen it offload TV channels in Russia, the Baltics, the Czech Republic, Ghana, Nigeria and elsewhere.

Nova is Bulgaria’s largest commercial media group and consists of seven TV channels and 19 online businesses that together generated SEK195m (US$24m) in operating income for the full year 2017, according to MTG. It employs 650 staff.