Bulgaria's bTV Sale Draws Mixed Responses among Analysts

The news that Central European Media Enterprises is buying Bulgarian television station bTV and its affiliate stations from News Corp. (NWS) for USD 400 M in cash has found mix reactions among analysts.

The purchase price of USD 400 M for bTV is well below the EUR 500 M figure that had been speculated in recent weeks, said Ondrej M1oravansky, analyst at Cyrrus brokerage who is current reviewing his recommendation and target price on CETV, as cited by Dow Jones Newswires.

"When I consider bTV's share on the Bulgarian TV advertising market, the size of that market, then the acquisition price it seems too high," said Joseph Nemy, analyst at Komercni Banka.

According to Nemy the Bulgarian television market doesn't have much room to grow because that television market's share of advertising as a percentage of gross domestic product is already much higher than in other CETV countries.

"The dynamics of growth on this market don't seem to be as high in future years as in countries like Romania," he said. Nemy has a sell recommendation on CETV and a target price of USD 25.

Analysts at KBC Securities in Warsaw told Dow Jones the acquisition should make CETV the market leader in Bulgaria, which until now was the one country in which the broadcaster didn't lead the market.

KBC Securities has a buy recommendation and a USD 33 target on CETV stock.

CETV, 31% owned by Time Warner Inc. (TWX) and founded in the early 1990s by cosmetics heir Ronald Lauder, will release its 2009 financial results on Feb. 24.

At 1512 GMT, CETV traded down 2.1% on the day at 525 koruna (USD 27.8) in Prague, lower than the overall market.

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