Sweden's Telia in talks to buy Bonnier's broadcasting business

By Helena Soderpalm and Johannes Hellstrom

STOCKHOLM (Reuters) - Telecom group Telia (TELIA.ST) confirmed it is in talks to buy Bonnier's broadcasting business, seeking to add TV content in a deal which a media report said could be worth 10-12 billion crowns ($1.2-$1.4 billion).

The initial report by Swedish magazine Resume, citing sources, prompted a brief trading halt in Telia shares, which fell as much as 4 percent after the news, and were down 2.7 percent by 1240 GMT.

Resume said that a deal could be announced as early as next month and the talks had been going on since last autumn.

Telia, in the process of completing an exit from its Eurasian businesses, had said previously it is interested in acquisitions in its Nordic core markets and is looking to boost its TV content.

"Content is an important part of the company's future strategy and we continuously investigate possibilities in this and other areas," Telia said in a statement, adding the discussions with Bonnier should be seen in that context.

Bonnier Broadcasting, which include brands such as Swedish TV4 and streaming service C More and Finnish MTV, had sales of 7.5 billion Swedish crowns ($861 million) last year and an operating profit (EBITA) of 423 million crowns.

Media group Bonnier, owned by a prominent Swedish family of the same name, said it was positive about a deal, without commenting further.

Telia's exits from Eurasia has left it with a strong balance sheet, raising expectations for generous shareholder payouts.

Pareto Securities analyst Stefan Ward said that an acquisition would narrow the possibility for raised dividends and buy-backs from the firm.

"Buying Bonnier is a change in strategy where Telia will likely invest a substantial share in becoming good at creating content," he said, adding the company had recently signalled it would distribute more capital to the owners.

In a global wave reshaping the telecoms and media sectors, including AT&T (T.N) and Time Warner's (TWX.N) attempt to merge, recent deals in the Nordics include Tele2's (TEL2b.ST) bid for cable-TV firm Com Hem (COMH.ST).

Closer to home, Swedish media group MTG (MTGb.ST) said in March it would split in two, demerging its Nordic TV business and listing it on the stock exchange, after a sale of the unit to Danish telecoms company TDC fell through.

(Reporting by Helena Soderpalm; Editing by Elaine Hardcastle and Keith Weir)