Changing viewing habits makes OSN pay-TV a tough sell

Competition from the likes of Netflix, Amazon Prime Video and other services have crashed the value of Dubai-based OSN
Changing viewing habits makes OSN pay-TV a tough sell
"OSN continues to face temporary headwinds," Anuj Rohtagi, a director at Kuwait Projects, said on a conference call last week.
By Bloomberg
Thu 22 Nov 2018 09:15 AM

Goldman Sachs may have a hard job finding a buyer for the Middle East’s biggest pay-TV service.

Competition from the likes of Netflix, Amazon Prime Video and other services have affected the value of Dubai-based OSN, which is up for sale - not for the first time in the past five years.

OSN’s controlling shareholder Kuwait Projects Co (KIPCO), which owns 60.5 percent, is now working with the US bank on options for the company after hiring Rothschild in 2013 to evaluate its strategy and business, including a possible share sale.

But times and viewing habits have changed since OSN was valued at $4.3 billion by Arqaam Capital in 2013. The following year Kuwait Projects rejected a $3.2 billion offer from an unnamed US buyout firm. A decision it’s likely to be regretting now.

Kuwait Projects’ share of profits from OSN slumped to a 19.8 million dinar loss ($65 million) in the first six months of the year, compared with a profit of 11 million dinars ($36m) in 2014.

At the end of September, Kipco classified OSN as a non-current asset held for sale with a value of 181.7 million dinars ($600m) on its balance-sheet.

"OSN continues to face temporary headwinds," Anuj Rohtagi, a director at Kuwait Projects, said on a conference call last week. The company is facing subdued demand in its "core markets owing to piracy (particularly BeoutQ platform), geo-political reasons and new fiscal reforms by government which has partly resulted in sizeable expat population base exiting from some of our core markets," he said.

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