Doughty Hanson tunes into TV3

UK-based Doughty Hanson has agreed to buy all of TV3, the only privately-owned terrestrial free-to-air national commercial television channel in the Republic of Ireland, for €265m (US$338.4m).

The move is dependent on TV3’s joint largest shareholder, UK-based television operator ITV, deciding against using the pre-emption rights held through its Granada Media Group subsidiary to match Doughty Hanson’s offer and sees the buyout firm trump rival offers from Northern Ireland’s UTV and US private equity firm Veronis Suhler Stevenson.

ITV and CanWest Global Communications, a Canada-based media company, both own 45% of TV3. CanWest also owns all of CanWest Ireland Sales, which holds the exclusive rights to sell TV3’s airtime and is included in the deal. CanWest said it would gain €138m from the deal.

Steven Bone, principal of Doughty Hanson, said: “Since its launch [in September 1998], which was independently judged to have been the most successful launch of a new television channel in Western Europe, TV3 has created an attractive proposition for both viewers and advertisers.”

TV3 is the second most-viewed channel in the Republic of Ireland, after RTÉ1, the state broadcaster, and has achieved compound annual sales and Ebitda growth of 8.3% and 21.5%, respectively, over last three years.

Doughty Hanson said it would pay for the deal using €140m of equity from its funds, with the remainder as debt provided by Anglo Irish Bank.

The deal is the seventh from Doughty Hanson Fund IV, which is now 60% invested after closing at €1.6bn in January 2005. Previous investments from the fund include Saft, Balta, ATU, Tumi, Moeller Group and HellermannTyton.

Hawkpoint Partners acted as financial adviser and Clifford Chance and A&L Goodbody as legal counsel to CanWest on the transaction.