Hellmann plans to sell or float some of Springer stake

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COLOGNE, Germany -- Private equity group Hellmann & Friedman is planning to sell or float about half of its 19.4% stake in German publishing giant Axel Springer AG.

The decision, announced by Hellman & Friedman and Springer on Monday, could almost double the shares in Springer floated on the German stock market and, potentially, significantly alter the company's share value.

Hellman & Friedman said it plans to sell about 10% of its Springer stake, either by floating the shares on the market if conditions are favorable or by selling them off to another private investment group.

Springer CEO Mathias Doepfner on Monday backed the move, saying it would boost Springer stock which, he argued, is currently trading under value. Currently less than 14% of Springer stock is in free-float. The bulk is controled by the company's founders.

"It has long been the view of the management board, and that of our bankers, advisors and many of our shareholders, that the extremely limited free-float of our shares, resulting in negligible daily trading volume, has prevented the true value of our shares being reflected in the share price," Doepfner said. "This view is strongly supported by a comparison of the prices at which the shares of other leading media, newspaper, magazine and online publishers trade. Therefore, we have encouraged, and strongly support the planned placement by Hellman & Friedman."

Deutche Bank will act as global coordinator for the placement, which is expected before the end of the year.

Hellman & Friedman acquired its stake in Springer in the fall of 2003, when the stock was trading at below ?50. Springer shares opened flat on Monday at ?117 ($146).

In addition to Springer, Hellman & Friedman are also part of the investors consortium headed by Haim Saban that control leading German commercial channel Pro7Sat.1.

Springer had agreed to buy Pro7Sat.1 from Saban but backed off earlier this year after signs that regulatory authorities might block the deal.
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