Springer to sell remainder of Pro7
EmptyMUNICH -- German publishing giant Axel Springer AG, whose attempt to take control of the ProSiebenSat.1 family of TV channels two years ago stirred up a hornet's nest of controversy, now intends to rid itself of its remaining interest in the broadcaster for the sum of €509.4 million ($749.7 million), the company said Monday night.
Springer will sell its 12% stake of common and preference shares to ProSiebenSat.1 owners Kohlberg Kravis Roberts & Co. and Permira, the private equity companies that acquired the broadcaster from a consortium led by U.S. billionaire Haim Saban after the Springer deal was slapped down by German media watchdogs in early 2006. The average price per share comes to €19.40 ($28.55) -- more than €1 above the company's share price on Tuesday morning after the news became widely known.
The sale, should it go through, will bring KKR/Permira's interest in ProSiebenSat.1 to almost 63%.
Springer did not return calls for comment.
Although it is one of Europe's biggest newspaper and magazine publishers, with total income of about €2.4 billion ($3.5 billion) in 2006, Springer's television interests are modest. Besides the stake in ProSiebenSat.1, the print giant owns 27% of two of Germany's major local-market stations, Hamburg 1 and TV.Berlin, and also has a fully owned subsidiary called Schwartzkopff TV which produces entertainment and talk formats. In terms of both reach and income, the ProSiebenSat.1 stake constitutes the lion's share of Springer's television holdings.
Public interest groups and even well-known German media figures spoke out loudly against Springer's attempts to acquire ProSiebenSat.1 when the publisher and Saban announced their agreement to sell in 2005. In the late 1960s and early '70s, Springer was a target of the counterculture in part because of its unfavorable -- and, according to its critics, untrue and sensationalist -- coverage of that era's events. Many were concerned that ProSiebenSat.1's news division could be used as a platform for jingoism after the takeover, a charge repeatedly denied by Springer. But the uproar most likely contributed to the rejection of the deal.
The current divestment is conditional on KKR/Permira securing debt financing as well as a thumbs up from the German Commission on Media Concentration (KEK) in Berlin. A KEK spokesman said that the issue would be considered at the organization's December meeting Tuesday, but he would give no estimate of when a decision might be reached.