Prisa Is Said to Work With Santander as It Weighs Share Sale

(Bloomberg) -- Promotora de Informaciones SA is working with Banco Santander SA on a potential capital increase to bolster its balance sheet after talks to sell an educational book publishing unit stalled on price, according to people familiar with the matter.

The company, known as Prisa, is considering raising about 400 million euros ($468 million) or more in a share sale, the people said, asking not to be identified because the deliberations are private. Talks to sell its educational books publisher business Santillana to private equity firms including Rhone Capital LLC stalled on valuation, the people said.

No final decision has been made and Prisa may still decide against a share sale and resume talks to sell Santillana or explore other options, the people said. The Madrid-based company said last month it is considering various options to cut leverage and is holding talks with several parties.

While Prisa's largest owner, Amber Capital with about a 19 percent stake, has been pushing for a capital increase for months, some other shareholders, including Grupo Herradura Occidente SA with 8.9 percent, are opposed to it, according to people with direct knowledge of the matter.

Telefonica SA, which owns 13 percent of Prisa, has said that it is seeking to offer stability to the company and that its stake is purely financial.

Representatives for Prisa, Santander and Amber Capital declined to comment. Grupo Herradura Occidente didn't return a call seeking comment.

Shares of Prisa advanced 1.5 percent to 3.25 euros at 11:02 a.m. in Madrid. The stock has lost 38 percent this year.

In previous attempts to sell Santillana, Prisa was seeking a price of as much as 2 billion euros, people familiar with the matter said at the time. The firm's efforts to raise cash led to the sale of Prisa's Portuguese unit Media Capital in July for 440 million euros, including debt.

--With assistance from Rodrigo Orihuela

To contact the reporter on this story: Manuel Baigorri in London at mbaigorri@bloomberg.net.

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Dinesh Nair, Ville Heiskanen