KKR Unveils Bid for Stake in German Media Giant Axel Springer, Valuing It at $7.7B

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Axel Springer CEO Mathias Dopfner

The owner of tabloid 'Bild' and Business Insider "has undergone a successful period of digital transformation from which the company has emerged as a leading European digital powerhouse," says KKR.

U.S. private equity firm KKR, which has been on a buying spree in the German media and entertainment industry, on Wednesday unveiled a bid to buy out minority shareholders of media giant Axel Springer, which owns German tabloid Bild and Business Insider, among others.

The buyout offer, which is subject to acceptances from 20 percent of the firm's share capital, of 63 euros ($71.36) per share values the company at 6.8 billion euros ($7.7 billion). 

KKR submitted the bid in agreement with the company's main shareholders, led by founder Axel Springer’s widow Friede and CEO Mathias Dopfner, and in support of the strategy of management.

"KKR’s offer is intended to enable a strategic investment in Axel Springer to support the company’s strategy in a partnership with Friede Springer and CEO Mathias Dopfner who together hold approximately 45.4 percent of Axel Springer’s share capital directly and indirectly," KKR said. "Both have committed to form a consortium with KKR, subject to the successful closing of the public tender offer in order to jointly further develop Axel Springer."

Axel Springer’s grandchildren, who own a 9.8 stake in the company, are not party to the deal and could decide to sell or reduce their ownership.

Springer shares were up 12.2 percent as of 12:30 p.m. German time. 

"Axel Springer has undergone a successful period of digital transformation from which the company has emerged as a leading European digital powerhouse," said Philipp Freise, member and head of the European technology, media and telecommunications industry team at KKR. "In light of the fast pace of change in the media sector, Axel Springer now needs continued organic investments and successful execution of its strategy so that the company can take advantage of the opportunities ahead."

KKR recently acquired Wiedemann & Berg, producer of the Oscar-winning film The Lives of Others and recent foreign-language Oscar nominee Never Look Away, after earlier in the year buying German mini-major Tele-Munchen Group, film distribution company Universum Film and production house i&u TV, a shingle co-owned by top TV host Gunther Jauch.