Swedish entertainment company Modern Times Group (MTG) said on Monday that it has decided to terminate its agreement to sell its Bulgarian unit Nova Broadcasting Group to Czech-based investment group PPF.
“The termination of the agreement with PPF Group follows the decision by the Bulgarian Commission for the Protection of Competition to disallow the proposed sale to PPF Group, as well as the expiration of an extended long-stop date under the sale and purchase agreement,” MTG said in a statement.
MTG has entered into discussions with other interested parties regarding the sale of its stake in Nova Broadcasting Group, the Swedish company said.
MTG also said it expects to complete its split into two companies – MTG and NENT Group – in March 2019, and Nova will remain part of MTG until its sale is completed.
Nova Broadcasting Group is 95%-owned by MTG, while Luxembourg-registered Eastern European Media Holdings holds the remaining 5%. PPF Group was planning to acquire the company through its Dutch-registered unit PPF TMT Bidco 2.
Bulgaria’s Commission for Protection of Competition banned the deal in July, saying that the significant number of media outlets owned by the two groups will give them a competitive advantage on the media services market, which might incentivise them to increase their prices, change the terms of existing contracts or restrict access to the market.
The competition regulator also found that both Nova Broadcasting Group and MTG are active on Bulgaria’s e-commerce market. Considering Nova Broadcasting Group’s leading position in media services, the deal is likely to negatively affect competition on this market, the authority said at the time.
In February, when the deal was announced, MTG said that the transaction values 100% of Nova at 185 million euro ($212.1 million).
MTG entered Bulgaria in 2007 via the acquisition of Balkan Media Group Limited, which operated the Diema TV channels. In 2008, MTG bought Nova.
In Bulgaria, Nova Broadcasting Group’s main rival is BTV Media Group, owned by Bermuda-registered Central European Media Enterprises.
Last year, PPF Group completed the acquisition of Norwegian mobile operator Telenor’s telecommunications assets in Bulgaria, Hungary, Montenegro and Serbia. The total purchase price of the assets was 2.8 billion euro on an enterprise value basis.