The Italian financial daily Il Sole-24 Ore put the likely bid price at $2.8bn, considerably less than the $4.6bn Fininvest and its advisers say the stake is worth, but this figure could not be confirmed.
News Corp refused to comment officially, but a senior executive said: “We are looking at it.” Fininvest said offers would be looked at on their merits.According to one of Mr Murdoch’s Italian lawyers, Marino Bastianini of the legal firm Carnelutti, News Corp is bidding to take control of 51 per cent of Mr Berlusconi’s three national networks and his television advertising company, Publitalia, with an option to take over the remaining 49 per cent if fast-evolving rules on media ownership in Italy permit.Mr Bastianini said he expected Mr Berlusconi’s holding company, Fininvest, to give an initial response “in the next few days” so both sides could discuss the nuts and bolts of the deal, notably the price Mr Murdoch would be willing to pay.”The price is yet to be set, and would of course depend on the likely political and legal restraints,” Mr Bastianini said. “But if all goes well, we would hope to have a contract signed in the next few weeks.”News Corp has about $1bn cash on hand, and expects to receive up to $2bn from MCI, which is to get a 13.5 per cent share of News Corp in exchange. MCI, 20 per cent owned by British Telecommunications, has said the News Corp link gives it a window on global television, including Mr Murdoch’s Fox network and satellite broadcaster BSkyB.Mr Berlusconi has been casting around for possible buyers for his television empire because a series of referendums scheduled for next month risk upsetting his monopoly position in the private sector. The call for the referendum is directly linked to the waning of his political fortunes following his resignation as Prime Minister last December.In building his media empire 15 years ago, Mr Berlusconi sidestepped domestic restrictions by initially beaming programming into Italy from Monte Carlo, a strategy followed by Mr Murdoch when he used a Luxembourg base to broadcast Sky TV in the UK.In the run-up to national elections last year, Mr Berlusconi was heavily promoted as a political candidate on his television stations. The anomaly of a senior politician dominating private broadcasting sparked the call for the referendums.Unless a political compromise can be worked out in the meantime, voters will be asked four questions on 11 June of direct relevance to Mr Berlusconi’s business fortunes. The most important is whether Mr Berlusconi should be allowed to keep all three of his channels, or whether he should be forced to sell up to two of them.Mr Berlusconi’s awkward position has prompted inquiries from several media tycoons in addition to Mr Murdoch.

But it is far from clear what benefit foreign investors could hope to gain from the situation, since any restrictions on media ownership would apply to them as much as they would to Mr Berlusconi.According to Mr Bastianini, Mr Murdoch would hope to conclude his deal before the referendums take place, thereby gambling his commercial future in Italy on their outcome. “Obviously, he will be drawing up various scenarios and establishing his negotiating position accordingly,” Mr Bastianini said.Mr Berlusconi’s television stations are dominated by dubbed American imports, buxom women and cheap and cheesy game shows. Until a buyer performs due diligence, it is not clear how profitable the holdings are, nor how labyrinthine Mr Berlusconi’s financing arrangements might be.Mr Berlusconi had sounded lukewarm about the possibility of selling his television stations to a foreigner, trying to stir up patriotic feelings to push voters on to his side in the referendums.He had also apparently ruled out selling off his television stations one by one. Fininvest has proposed lumping its three network channels – Retequattro, Canale 5 and Italia 1 – plus Publitalia together into a single company, which would then be floated on the open market. Clearly, the hope was that Mr Berlusconi would remain the biggest shareholder and so continue to be able to exercise some control.But Mr Murdoch, according to Mr Bastianini, does not simply wish to buy into Italian private television; he wants to take it over.

He is believed to be holding out for nothing less than a majority stake.Comment, page 17. The Takeover Panel is expected to be asked next week to rule on whether Swiss Bank should stop acting as adviser to Trafalgar House when it takes over SG Warburg, which advises Northern Electric. An unfavourable ruling by the Takeover Panel could spark a bitter row. Swiss Bank is believed to be determined to retain its link with Trafalgar, despite the unwritten City constitution that it should unilaterally relinquish its role because Warburg’s knowledge of Northern would give it an unfair advantage if Trafalgar renews its takeover bid for the electricity company.
Trafalgar failed with a £1.2bn bid for Northern Electric in March, but is expecting to make a renewed take-over attempt within the next few months. Swiss Bank is believed to have decided to retain its role as Trafalgar advisor on any new bid and to ask SG Warburg to drop Northern to avoid conflict.The electricity firm, however, will next week ask the Takeover Panel to take a view on the issue.One industry source said: “It is possible that both banks will be asked to step down.”Northern Electric, which declined to comment, is thought to have received expressions of interest from several merchant banks wishing to fill Warburg’s shoes.There has been speculation that it has approached Morgan Stanley.

A spokesman for Northern said there has been no change in the situation.The Swiss Bank bid for Warburg is the latest twist in a long, drawn-out and bitter battle between Trafalgar and Northern Electric.A bid for Northern at £11 per share lapsed in March after the industry regulator, Offer, announced a review of electricity distribution prices.The Takeover Panel then rejected attempts to come back with a £9.50 per share. Trafalgar must wait until next March to bid again, unless it is allowed to do so by the Northern Electric board.The saga has continued in intervening months, with Northern Electric coming under pressure from some shareholders, led by the US arbitrageur, Wyser-Pratte, to allow a new bid.The company has now been forced to call an extraordinary general meeting on 2 June to allow shareholders to vote on the whether a £9.50 offer should be allowed to proceed but has asked them to reject the move Northern’s shares were up 1p yesterday at 821p.. The Bank of England, Barclays, Lloyds and Midland banks are to sell about 20 per cent of 3i, the venture capital group, it was announced yesterday. The £400m sale is expected to take place shortly after 3i reveals its 1994 results on 8 June, and will go mainly to institutional investors in one of the biggest ever secondary issues on the London market.
Originally known as Investors in Industry, 3i has for some 20 years been a leading provider of long-term finance to companies throughout the UK – particularly medium-sized manufacturing businesses.The cashing-in on 3i’s strong share performance, which had been expected for some time, will reduce the stake held by the big banks to about 32 per cent. Exact details of the sell-off have not yet been finalised, nor whether some of the banks will sell out completely or retain a portion.The Bank of England is widely expected to part with all its 6.6 per cent. The biggest single investor, NatWest Group, yesterday said it would retain its 18 per cent stake, as will the Bank of Scotland with its 2.5 per cent.A NatWest spokesman said the “bank is very comfortable with its investment and the sector.