London -- Canal Plus pulled another rabbit out of its hat,
signing an audacious, eleventh-hour agreement to merge its Telewizja Korporacja Polska
(TKP) Polish unit with potential competitor *Entertainment.
Canal Plus' stand-alone channel, Canal Plus Polska,
will join the *Entertainment's Polish digital, direct-to-home bouquet -- Wizja TV --
as an investor and programming provider.
The deal was announced April 17, just one day before Wizja
TV was to bow. Wizja will now debut in September as a result of the merger.
The agreement is subject to regulatory approval and complex
shareholder restructuring. The final ownership structure will include DTC Productions, a
Polish unit of *Entertainment; and Canal Plus, which will each own 40 percent. Agora, a
Polish media group; and Polcom, a Polish investment company, will each hold 10 percent.
The agreement does not include the existing Polish cable
interests of *Entertainment, known as Poland Communications Inc., which include 800,192
Canal Plus Polska, a year-old premium pay channel
operation, is the combined result of the merger of the Canal Plus Polska channel with
NetHold's FilmNet channel in Poland.
Canal Plus had been threatening to launch a competing DTH
platform to Wizja later this year. Now the combined plans for Wizja TV will include three
multiplexed versions of Canal Plus Polska, plus a wide choice of Polish and international
channels, including U.S. networks such as Fox Kids and Cartoon Network and the European
documentary service, Planete.
Both *Entertainment and Canal Plus have agreed in their
letter of intent to a "standstill agreement for a period of 45 days" -- a clause
that has led some to believe that, if the deal falls apart, Canal Plus will still benefit
by having delayed the launch of Wizja TV.
The Polish merger announcement is a coup for Canal Plus,
which now has direct involvement in Europe's final "major" digital DTH
market with some 10.7 million television households. It adds a significant chunk to the
Canal Plus empire, which now stretches from the northernmost point of Scandinavia to the
Benelux countries, France Germany, Italy and Spain.
Indeed, with the full launch this autumn of its
Internet-by-satellite service, Canal Plus can claim to be a Europewide player.
"Canal Plus is poised to be a clear winner in the
digital war," said a recent report by analysts at Lehman Bros., who rate the
company's stock a "buy."
In contrast, British Sky Broadcasting, Canal Plus'
peer, has largely been unable to expand across the English Channel and become a regional
powerhouse, despite its home-market dominance.