Dubai to decide on Europe media purchase

By Dayan Candappa

DUBAI (Reuters) - Dubai's Istithmar will decide in the next month on whether to buy a controlling stake in a $4 billion Western European media company, the chief executive of the government-owned investment agency said on Sunday.

Istithmar, which plans to invest as much as $3 billion this year, first said it was considering a European media acquisition in October. That investment is among six-to-eight deals Istithmar is working on, Chief Executive David Jackson told the Reuters Middle East Investment Summit in Dubai.

"If we can't make something happen in the next month I think we would kill it," Jackson said, declining to name the company or give details.

Istithmar has yet to begin due diligence on its target and the fluctuating value of the investment was among factors holding up a decision, Jackson said.

"Our view of what would be the fair value for it has changed a couple of times in both directions," he said.

The European media investment was among three Jackson identified in an interview with Reuters in October. The others were a controlling stake in a $2 billion North American consumer firm and the European manufacturing unit worth $1 billion.

The latter was a reference to Istithmar's failed bid for a stake in Ford Motor Co.'s (F.N: Quote, Profile, Research, Stock Buzz) British Luxury car unit Aston Martin, Jackson explained on Sunday.

Ford sold the Aston Martin stake this month for 479 million pounds to a group fronted by former Benetton motor racing boss David Richards. The group included Kuwait's The Investment Dar

TDIK.KW.

The North American consumer sector deal is unlikely to be completed, partly because Istithmar's view of the company's value. "It's on life support," Jackson said, declining to name the company.

Istithmar is one of the investment agencies Dubai, commercial hub of the Gulf Arab region, has used to wean its economy off dwindling oil exports.

Riding a wave of growth powered by a near tripling of oil prices in the five years to July, Gulf Arab investors have spent around $76 billion on foreign mergers and acquisitions since 2002, almost 90 percent of that in 2005 and 2006.

Dubai blazed the trail for Gulf investors, with acquisitions of everything from port operators to real estate.

Istithmar has made $4 billion worth of investments in the past four years, including a 2.7 percent stake in Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) bought in October for $1 billion, Jackson said.

Speculation Istithmar would increase its stake had pushed Standard Chartered shares to a six-month high in October.  Continued...