KKR to buy out Axel Springer stake
BERLIN — Axel Springer SE said Wednesday it reached an agreement with KKR & Co. for the private-equity firm to buy out its minority shareholders in a deal valuing the German media company at EUR6.8 billion ($7.7 billion).
Shares in Axel Springer, the publisher of some of Europe’s biggest newspapers, shares rose over 12% in morning trade.
Under the terms of the deal, which has the backing of Axel Springer’s management and supervisory board, KKR is offering shareholders EUR63 a share in cash.
Friede Springer, widow of the media company’s namesake founder who controls 42.6% of the company’s shares, and Chief Executive Matthias Döpfner, who owns 2.8%, will retain their shares and continue to be involved in Axel Springer to the same extent as before, the company said.
The size of KKR’s stake will depend on how many minority shareholders accept its offer.
Axel Springer on Wednesday also issued a profit warning. The company lowered its profit and sales targets for 2019, blaming global economic woes and a new digital tax introduced in France. It warned that because of planned investments in its new strategy, which it is holding on to despite the more difficult economic backdrop, its operating profit would likely be lower next year.
The company said the partnership with KKR would help achieve its goal of becoming "the leading global provider of digital content and digital classifieds."
"The strategic partnership with KKR would enable us to pursue major growth opportunities by providing additional financial capabilities while relieving the mere focus on short-term financial targets," Mr. Döpfner said. KKR has previously invested in other German media companies, including broadcaster ProSiebenSat1.
Berlin-based Axel Springer owns such titles as Germany’s Bild and Die Welt, two of the country’s largest dailies, with a combined subscriber base of more than 500,000 as of 2018.
In recent years, Axel Springer has worked to build up its classified media division to offset stagnant and declining growth in its news and advertising businesses.
KKR’s takeover offer is subject to a minimum acceptance of 20%.
Axel Springer said KKR’s bid offers a 40% premium to the unaffected share price of EUR45.10 on May 29, the last closing price before the publisher confirmed a prior news report that it was in talks with KKR for a strategic investment, prompting a 20% jump in its share price.
Axel Springer said its current management board would continue to lead the group while Ms. Springer’s stake would assure the company continuity in governance and management.
–Christina Roca contributed to this article.
Write to Ruth Bender at [email protected]
Source: Read Full Article