Pace to gain from Thomson pain?

Thomson of France is in deep trouble. The company is already selling off its important Grass Valley camera and equipment division, and said Mar 10 that it is now in breach of its banking covenants. Thomson is said to need around €250m to stay afloat.

Pace, which is a major rival to Thomson in the supply of TV set-top boxes, saw its shares respond into very positive territory March 11 and again Mar 12.

Thomson on Tuesday reported deeper net losses for 2008, and reported net debt of €2.1bn and said the 2008 loss was dragged down by goodwill write-downs of €378 million for its Grass Valley broadcast equipment unit, €139 million for its DVD business, and €143 million for its film and content services activities. Restructuring charges amounted to €204 million while asset write-offs came to €367 million. Revenues for Q4 fell 9.4% to €1.47bn.

"We spent too much, we bought too many things," Chief Executive Frederic Rose said at a press conference Tuesday. Thomson’s share price fell from an already depressed position another 17%, to €0.47.

To place the news in context, Thomson (during Q4/2008) maintained its top position in terms of satellite STB unit shipments, followed by Echostar and Pace. We know (see Mar 11 edition of Rapid TV News) that Echostar is aggressively busy in Europe seeking to boost its business presence, and perhaps re-entering the retail sector. If Thomson should stumble in terms of its set-top box production or confidence ebb in their ability to supply boxes then Pace (and others) would certainly benefit.