RTE has taken the first step towards the sale of a majority stake in its transmission network, with the appointment of London investment bank N.M. Rothschild to handle the sale. Rothschild also handled the sale of Cablelink for RTE and Eircom when NTL paid £535 million (€679 million) for the cable network.
The exact timing of the sale will depend on how quickly the Broadcasting Bill passes through the Oireachtas, but it is understood that RTE and its advisers aim to have the sale completed sometime in the first half of 2001. The Broadcasting Bill, which includes the sale of 72 per cent of RTE Transmission, is expected to be introduced to the Dail later this year.
Rothschild declined to discuss the planned sale, the likely valuation on RTE Transmission or the likely bidders. But it is understood that the Government's adviser, AIB, has valued the network at around £30 million. RTE is thought to have tentatively valued the network at double that figure.
A number of private equity houses - mainly American - have been active buyers of these sort of transmission assets in Europe, but sources believe that the 72 per cent of RTE Transmission is more likely to be taken up by a single buyer already active in the telecommunications industry.
NTL - owners of Cablelink and the former IBA mast network in the UK - is seen as one interested party. Crown Castle, the US network which owns the former BBC network in the UK, is also expected to take at least a look at the information memorandum once the passing of the Broadcasting Bill allows the sale of the majority stake to go ahead. Industry sources said that other potential bidders included Irish mobile phone companies such as Eircell and Esat Digifone.
Whoever does end up buying the 72 per cent of the transmission business being sold by RTE will also have to invest in major upgrading of the network of 130 sites. RTE itself will aim to expand its current and digital transmission to digital terrestrial television using a guaranteed number of channels.
The new investor is also likely to use the network to provide enhanced mobile telephony, third generation UMTS, digital television and other ancillary services.
