Bauer
BERLIN -- With its bid for the assets of bankrupt TV giant Kirch Media facing regulatory trouble, Hamburg-based publishing group Heinrich Bauer is mulling taking a smaller stake in the company, with a bigger share going to investment partner and Kirch creditor HypoVereinsbank.
Bauer had planned to assume a 90% stake in Kirch, which holds a majority share in broadcasting group ProSiebenSat.1 and a vast film library, while HypoVereinsbank was to take 10%.
The bank is reluctant about the plan, however. "HypoVereinsbank sees its participation as a limited strategic investment and would likely seek to sell its stake to Bauer within three to five years time," said a source close to the bank. "It doesn't want to get too involved in the new company."
Nevertheless, Bauer has strong support from the bank and this may be a way to sidestep regulatory concerns.
Federal antitrust watchdogs are worried because the publisher has a 30% stake in rival web RTL 2 -- which would give it a 26% market share after a Kirch takeover -- and because of its domination of the TV guide and magazine market, which could pose a conflict of interest. Bauer has said it will not part with its RTL 2 stake, which enjoys a healthy 20% profit margin.
Local observers still back Bauer to win the bid because of the "general desire for a German solution."
Rival bidders Haim Saban and French media group TF1, meanwhile, are to present a binding offer to Kirch creditors on Monday.
Although TF1 chief Patrick Le Lay sounded ambivalent about committing to the takeover bid during an analysts' conference last week, sources say the French group is solidly behind Saban. Le Lay, who met with Saban in Berlin last week, said TF1 would cap its contribution at $430 million. The consortium is expected to offer around $2.16 billion for the assets: $760 million for ProSiebenSat.1 and $1.4 billion for the library.
While Bauer's bid is said to be roughly the same amount, the very liquid Saban can offer cash as opposed to Bauer's long-term financing plan. That could be a big plus for Kirch's creditor banks, which have seen their own liquidity evaporating.
A final decision is expected this month after creditors review Saban and Bauer's final offers next week.
Contact Ed Meza at
ed.meza@mannaa.de