Prisa seals $900m Liberty deal

Prisa has secured an injection of up to $900m under a merger deal with a US vehicle run by Nicolas Berggruen, the "homeless billionaire ", and Martin Franklin, a former tennis partner of "Chainsaw" Al Dunlap.

The deal will see the 70 per cent stake held by the Polanco family and its affiliates cut in half.

Prisa stressed that the family, which founded part of the group, would retain control through bylaws limiting voting stakes of other shareholders.

The publisher of Spain's El País will take control of Liberty Acquisition , a US-listed special purpose acquisition company run by Mr Franklin and Mr Berggruen , through a share swap.

Mr Berggruen, who lives in hotels after giving up most of his possessions apart from his art collection and private jet, set up Liberty in December 2007 with Mr Franklin, who runs Jarden, the group behind the Sunbeam Rocket Grill and Gulp fishing bait.

The two investors have used other SPACs, or "blank check companies", to invest in GLG Partners, the UK hedge fund group, and Pearl Group, the assurer.

The deal could reduce the family's holding to just above 30 per cent. Prisawould be listed as American depositary receipts on the New York exchange.

The group plans to offer new shares, at a 12.5 per cent discount to the value of the Liberty deal, to minority shareholders representing about 30 per cent of the existing capital.

Prisa, which owns the Santillana publishing house, has been under stress since it was forced to buy all of Sogecable, its TV holding group, just before the financial crisis hit, driving up the cost of corporate debt.

"The deal with Liberty will allow Prisa to consolidate its financial situation," Juan Luis Cebrián, chief executive, said.

Mr Berggruen, who in 2007 sold Prisa a stake in Media Capital, his Portuguese business, told the Financial Times he was attracted by the belief that "dominant" media brands would become more so over time, Prisa's chance to tap Latin America's growth, its strong cash generation and the financial opportunity.

Mr Franklin pointed to opportunities for Prisa to raise its digital revenues, find faster growth in Latin America and expand Digital+, its pay-TV business.

He said he and Mr Berggruen would join the board and be "long-term investors".

Pressure from lenders forced Prisa to sell stakes in most of its divisions, including 44 per cent of Digital+, to Mediaset, Silvio Berlusconi's group, and Telefónica, the Spanish telecoms company.

Added to proceeds from such divestments, the Liberty deal gives it €2bn ($2.7bn) in cash, against net debt of about €5bn.

Prisa has reached a deal with seven banks to extend until 2013 a €1.8bn bridge loan used to buy out Sogecable minorities.

Copyright Financial Times 2010