CanWest Global Communications Corp.,
Turkcom Highest Bidder to Acquire Interest in Metro FM
Winnipeg, Canada (ots/PRNewswire)
- CanWest Has Option to Acquire 75% Interest in Metro FM, and Will Provide Certain Advisory Services to the Turkish Radio Station
CanWest Global Communications Corp. today announced that, following completion of an auction conducted earlier today by the Turkish Savings and Deposit Insurance Fund (the Fund), Pasifik Televizyon Ve Radyo Yayinciligi Ticaret A.S. (Pasifik) has been awarded the right to acquire the assets of Metro FM, a radio station with national reach in Turkey. Pasifik is a wholly-owned subsidiary of Turkcom Iletisim Hizmetleri A.S. (Turkcom). The total consideration bid by Pasifik for Metro FM was US$22.85 million, which will be payable in cash on completion of the acquisition. The transaction, which is subject to regulatory approvals by certain Turkish authorities and the Fund, is expected to be completed within the next 90 days.
CanWest's wholly-owned subsidiary, CGS NZ TV Shareholdings (Netherlands) B.V. (CGS) has entered into certain agreements with Pasifik and Turkcom whereby CGS will through a Turkish subsidiary provide certain non-regulated operational, sales representation and advisory services to Metro FM on a fee-for-service basis. Subject to a relaxation in current foreign ownership restrictions and receipt of all necessary regulatory approvals, CGS has an entitlement to acquire up to a 75% interest in Metro FM.
Metro FM is Turkey's most popular national radio station broadcasting in the English-language popular music genre. Metro FM's English-language music programming appeals to a young affluent urban audience and also to visiting tourists, audiences with high disposable income that are of great interest to advertisers. Metro FM's 4.9% market share is greater than the combined market shares of the next two most popular national stations broadcasting in the same English-language music format. The station's reach extends to approximately 40% of Turkey's population - about 28 million people.
This announcement follows CanWest's announcement yesterday that it had acquired a 25% interest in Super FM, one of the most popular radio stations in Turkey, in partnership with Turkcom.
The Fund will be auctioning several additional media operations over the next two weeks. Turkcom is currently considering its participation in these upcoming auctions If it is successful in acquiring additional media assets in this process, CGS will have similar rights to provide certain non-regulated operational, sales representation and advisory services to those additional assets, as well as having, subject to relaxation in current foreign ownership restrictions and receipt of all necessary regulatory approvals, entitlements to acquire up to 75% interests in those additional assets.
"We are delighted that Turkcom has been the successful bidder for Metro FM, and that we will play a meaningful role in the station," said Tom Strike, President of CanWest MediaWorks International.
Gregory M. Kiez, a director of Global Investment Holdings, and Mr. Fatih Akol, both speaking on behalf of Turkcom, said "We are very pleased with the success of Pasifik's bid for Metro FM. We believe that there is potential for considerable growth at Metro FM, both from building upon the station's appeal to its target audience and by expanding its relationships with advertisers. We believe that our operational relationship with CanWest will be an important asset as we take advantage of CanWest's extensive international experience in running profitable media operations."
Turkcom is a private Turkish investment company advised by Global Yatirim Holdings A.S. (Global Investment Holdings).
CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.SV and CGS.NV, www.canwestglobal.com), an international media company, is Canada's largest media company. CanWest is Canada's largest publisher of daily newspapers, and also owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, Web sites and radio networks in Canada, New Zealand, Australia and Ireland.
Global Investment Holdings is a holding company publicly listed on the Istanbul stock exchange (ISE: GLYHO, www.globalyatirim.com), with operations in the infrastructure, energy and finance sectors in Turkey, including a wholly-owned finance unit, Global Menkul Degerler A.S. ("Global Securities") (www.global.com.tr) which has been the leading independent brokerage and corporate finance firm in Turkey since 1990.
Backgrounder on Turkey
Basic Statistics:
Population: 72 million
Area: 780,000 square kilometers, 301,000 square miles
Turkey ranks 17th in global economy, based on GDP
GDP: US $300 billion (2004)
Per Capita GDP: US $4,172 (2004)
GDP growth rate 7.8% (2004)
52% of exports go to EU countries, which in turn provide 46% of Turkish
imports
Memberships: NATO, OECD, IMF, and WTO
Seeking membership in EU, negotiations set to begin October 2005.Political System:
Modern Turkey is a secular multi-party democracy. Economic reforms over the past several years, including privatization of state-owned industries, have strengthened the role of the private sector and increased the influence of market forces on the Turkish economy. Turkey has achieved rapid economic growth since 2001, when the country implemented a number of structural economic reforms.
Today, Turkey welcomes foreign investment. Foreign direct investment is expanding rapidly as the government actively seeks to attract more investors by creating a favourable investment environment through changes in its tax and legal systems.
The Turkish Media:
Total Advertising Market
Advertising should benefit from the sustained and rapid economic growth, and reducing inflation rate that have characterized the Turkish economy over the past four years, and particularly since Turkey adopted an economic and structural reform program under the guidance of the IMF.
Turkey has a relatively low advertising level, with advertising expenditures currently representing only 0.41% of GDP in comparison to other countries in similar stages of economic development, such as Hungary (2.0% of GDP), Poland (1.4% of GDP) and Bulgaria (1.2% of GDP), suggesting considerably potential for growth in spending on advertising in Turkey.
The total Turkish advertising market was US$1.23 billion in 2004, 40% higher than the previous year's US$880 million and with consistent growth since 2001.
Radio:
Total advertising spending on radio was $46 million in 2004, with significant growth in spending in each of the previous two years.
Kral FM, Super FM and TRT FM are the leading national radio stations with many smaller and local stations. The pattern of ownership is similar to television, with a rapid expansion of private sector stations following the legal removal of the state monopoly in 1990.
The Turkish government created a regulatory and licensing body - RTUK - in 1994. RTUK regulates the amount of time available for commercials on radio. No advertising is permitted of alcoholic beverages, tobacco products or prescription or non-prescription drugs.
September 22, 2005
Corporate Affairs
CanWest Global Communications Corp
(Note: The above material compiled from various reliable sources, both published and unpublished, and is thought to be accurate at time of compilation)
Contact:
For further information: Geoffrey Elliot, Vice President, Corporate
Affairs, CanWest Global Communications Corp., Tel: +1-(204)-956-2025,
Fax: +1-(204)-947-9841, gelliot@canwest.com