Telefonica Hires Lehman for Endemol Sale

Spanish telecoms group Telefonica has formally launched the sales process for its stake in Dutch TV firm Endemol by hiring Lehman Brothers as adviser, both firms said on Friday.

Speculation as to who might buy the 75% stake in Endemol, the creator of worldwide reality TV hit "Big Brother", has swirled for months, with private equity firms and Endemol co-founder John De Mol considered to be interested bidders.

Analysts have cited Endemol's run of hit formats, global network, strong cash generation and underleveraged financial position as attractive for potential bidders.

Endemol said in a statement on Friday that Telefonica had asked Merrill Lynch to offer stapled financing to the eventual buyer of Endemol.

"If Telefonica were to decide to divest its 75% stake in Endemol N.V., it is its intention to solicit from the potential purchaser a public offer for the other 25% of the shares outstanding in Endemol N.V.," Endemol said.

Telefonica, which bought Endemol for 5.5 billion euros ($7.25 billion) in 2000, listed a stake in the company in 2005. Endemol's current market capitalisation is around 2.7 billion euros.