Time Warner Raises Stake in Broadcaster Central European Media to 49.9 Percent
The entertainment giant first acquired a stake in the company, which has struggled with debt, in 2009.
LONDON - Time Warner has increased its stake in broadcaster Central European Media Enterprises from 40 percent to 49.9 percent.
CME, which has struggled with debt, said late Tuesday ET that it has completed the exercise of a put option under a previously announced agreement with the entertainment conglomerate. It has issued approximately 875,000 additional Class A shares to TW in a deal worth approximately $90.8 million. The stock was issued instead of a debt repayment by the firm.
TW also has a share of preferred stock that it can convert into more Class A stock, which would give it a majority stake, once a voting agreement with an affiliate of CME non-executive chairman Ronald Lauder expires next year.
Lauder has the right to vote TW's stake until May 2013. Until then, a standstill agreement blocking the entertainment conglomerate from acquiring more than 50 percent is in place.
CME is one of TW's biggest bets on Europe. Analysts have projected growth for Eastern Europe, but continued economic weakness and financial challenges in European countries have made the investment somewhat of a rough ride.
CME is a media and entertainment company operating TV businesses in six Central and Eastern European markets, the biggest of which is the Czech Republic.
TW first took a stake in CME in 2009, acquiring 31 percent for $242 million.
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