Russian magnate takes stake in U.S.-owned CME

Gusinsky buys 17.3% of media co. for $6.7 mil

By TOM BIRCHENOUGH

MOSCOW -- CME may have lost a suitor in Euro giant SBS, but Russian media magnate Vladimir Gusinsky has taken a 17.3% stake in U.S.-owned Central European Media Enterprises.

Recently SBS, another U.S.-backed Euro station holder, broke off plans for a merger with CME due to problems at its flagship station Nova in Prague.

Gusinsky's stake became public after his associated companies filed with the U.S. Securities and Exchange Commission, showing that group had bought the CME stake for $6.7 million between Sept. 13 and Oct. 1.

The stake was purchased at prices ranging from $1.62 to $2.70. CME shares, traded on Nasdaq, stand at about $1.90, well down from a summer high of $14.

Their drop in value follows legislative and signal ownership disputes at Nova, the only one of its six TV stations in Eastern Europe that had achieved positive cash flow.

Move came as a surprise for many analysts in the region, not least because Gusinsky's Media-Most holding company, which runs Russia's top commercial channel NTV, has appeared to be under financial and political pressure at home.

Company has been subject of rumors alleging that it is overburdened with debt, and it recently lost initial court action brought by creditor Vneshekonombank for return of loans made to the group of around $61 million. Media-Most and its associated structures are appealing the decision.

Gusinsky's filing stated that he had the right of control over 3.2 million limited-voting A-class shares. It added that Gusinsky "may seek to enter into discussions with the issuer CME about potential areas of mutually beneficial business cooperation." The Russian magnate's only other overseas media interests are a stake in Israel's Maariv group.

Media-Most spokesman Dmitry Ostalsky said the CME share was held by its Gibraltar-registered company Elemental Ltd.