Kinowelt, Intertainment deal gets OK


COLOGNE, Germany -- German stock market authorities ruled late Friday that Kinowelt will not be required to buy out minority shareholders of licensing group Intertainment AG, opening the way for Kinowelt to acquire Intertainment and merge it with co-financing division Epsilon Motion Pictures.

Kinowelt and majority shareholder MK Medien signed a deal in May to acquire a 53.6% stake in Intertainment from the company's founder and former CEO Ruediger Baeres (HR 9/8).

But the deal was contingent on authorities freeing Kinowelt from the usual requirement to make a buyout offer to Intertainment's minority shareholders.

Now, Kinowelt has the green light to complete the deal and move forward with its plan to merge Intertainment, which holds European rights to a library of titles including "The Art of War," "The Whole Nine Yards" and "Mulholland Falls," with Epsilon.

Originally set up by media mogul Leo Kirch's KirchMedia, Epsilon is a co-financing entity with licensing deals with several independent production companies including Regency and Lakeshore.

Kinowelt acquired Epsilon last year in the wake of the 2002 KirchMedia bankruptcy.

Epsilon titles including "Mr. & Mrs. Smith," "Million Dollar Baby" and "The Constant Gardner" have helped Kinowelt return to the premiere league among German independent distributors.

Kinowelt now plans to fold Epsilon into Intertainment, which is listed on the German stock exchange, by Sept. 30.

"With the acquisition of a majority stake in Intertainment AG, Kinowelt takes another step forward in its expansion strategy," Kinowelt founder Michael Koelmel said in a statement. "With the transfer (of Epsilon's assets) we will strengthen Intertainment's core business, namely the co-financing of high-quality American films."

Kinowelt shares were up 7% in trading to €0.30 ($0.39) by late afternoon Monday. Intertainment stock was up 12.1% at €1.85 ($2.4).