BT considering bid for Setanta

Telecoms giant BT is considering making an offer for Setanta, the Irish pay-television company, in a deal that could be worth hundreds of millions of pounds. Setanta owns the rights to show some live Premier League football.

BT owns a small digital television service, BT Vision, which offers Setanta’s sports channel to users. Should BT be successful, it could boost its television prospects since Setanta’s hold on the Premier League rights makes it a big draw for subscribers.

It is understood that BT previously made an approach to acquire a minority stake but is now considering making an offer for the entire firm.

Insiders close to Setanta say all approaches so far have been tentative and serious offers are not expected in the short term.

Setanta was formed in 1990 by Irishmen Michael O’Rourke and Leonard Ryan to facilitate the broadcasting of Irish sporting events to Irish expatriates.

In May 2006, the company broke Sky Sports’ 3-year monopoly on showing Barclays Premier League football in the UK, successfully bidding £392 million for the rights to show 46 matches per season on its multiplatform subscription channel.

Oservers believe the company has a limited window of opportunity to sell itself since negotiations for the next Premier League rights begin in December and will end in June 2009.

Setanta’s major shareholders include private equity firms, Balderton Capital and Doughty Hanson.

The company has around 1.1 million premium subscribers in addition to 2 million who subscribe to the channel as part of a package from Virgin Media. The company expects to turnover £370 million this year.

Setanta has asked investment bank Goldman Sachs to deal with any enquiries about the sale.

Earlier this month, BT announced that it was to increase the cost of line rental by 7% and daytime calls by 23%, but will give 10 million customers free weekend calls.

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