Russian Tycoon to Buy 75-Percent Stake in Broadcaster CTC in $200 Million Deal
The agreement with Alisher Usmanov was triggered by a need to comply with a new law limiting foreign ownership of media companies.
Russia's leading independent broadcaster, CTC Media, on Friday announced the sale of a 75-percent stake to tycoon Alisher Usmanov's UTH in a bid to comply with a controversial law limiting foreign ownership to 20-percent stakes.
CTC Media and UTH have entered "a definitive agreement" for the deal valued at $200 million, announced CTC Media, in which Sweden's Modern Times Group (MTG) owns a 38-percent stake.
"Although it is unfortunate that Russian law will require that we effect a sale of the operating businesses, we believe that UTH will be a good new owner of the business and will be well positioned to build on the historical success of CTC Media as the first and leading commercial broadcasting network in Russia," said Werner Klatten, an independent member of CTC Media's board.
"The sale agreement will enable the management team to focus on the business, with the issue of compliance with the Mass Media Law resolved," added Yuliana Slashcheva, CTC Media's CEO.
When the law limiting foreign ownership in Russian media companies was adopted a year ago, stirring controversy and sending shock waves across the industry, CTC was among those companies hit hardest, and its stock took a substantial plunge.
MTG later said it was going to retain a 20-percent stake in the company as long as the group had "a leadership position in influencing the way that [CTC Media] operates."
MTG "has indicated that it is prepared to support the transaction based on the terms of the agreement with UTH and the ability of [CTC Media] to return value to stockholders," said Friday's press release. "Following the closing of the sale of the 75-percent interest to UTH, the [CTC Media] board intends to return value in cash to the Company’s stockholders."
Established in 2009 following the merger of Media One Holdings and Art Finance & Media, UTH owns the networks U Channel, Disney Channel and MUZ-TV.