CME buys MediaPro despite disappointing Q2

Part of strategy to become European production powerhouse

COLOGNE, Germany -- Central and Eastern European broadcast group CME Enterprises has completed its takeover of MediaPro Enterprises even as CME figures reveal a 49% profit slump in Q2.

CME paid $10 million in cash plus 2.2 million CME shares, valued at about $50 million, for the remaining shares in MediaPro. The production giant, founded by CME president and COO Adrian Sarbu, churns out more than 500 hours of TV and film programming annually. Around 40% of MediaPro's $95 million in annual revenues come from sales to CME-owned stations. CME previously held a small minority stake in MediaPro.

The buyout is part of CME's strategy to become a European production powerhouse. Time Warner helped bankroll the expansion when it bought a 31% stake in CEM for $241 million in May.

News of the MediaPro deal came just ahead of CME's second quarter results, which revealed profits had slumped 49% year-on-year to $22 million in Q2.

Revenues at the group, which operates 19 channels in seven central and eastern European countries, slumped 38.9% to $186 million. In response, CME lowered its operating income by a startling 88% to just $11.7 million in Q2 2009.

Shares in CME on the Nasdaq were down more than 4% at $20.43 in early trading Wednesday.