June 25, 2009 / 3:40 PM / 9 years ago

STOCKS NEWS EUROPE-Italy's Dada up on Sony deal

Shares in Italian internet and entertainment services group Dada DA.MI are up nearly 6 percent after signing a strategic content agreement with Sony Music Entertainment (6758.T).

“Despite the limited impact on Dada’s financials in the short term, this move could represent a significant change in the equity story of the company,” Italy’s Mediobanca says in a note.

Under the deal, Sony Music will acquire a 13 percent stake in Dada.net, Dada’s mobile music operation. In exchange, Dada will get 50 percent stake in Dada Entertainment, a joint venture between the two companies.

The two companies also signed a new content distribution agreement enabling Dada to offer a wider selection of products and services with content from Sony Music artists.

“It might not be much for Sony, but for Dada it’s a big strategic move in a music download sector that is destined to grow,” a Milan analyst says.

Reuters Messaging rm://stephen.jewkes.reuters.com@reuters.net

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