A media empire is up for grabs. A stake in Formula 1 racing, world cup soccer TV rights, and a tabloid newspaper are being auctioned off in a bid to save Kirch Gruppe.
Last Friday, one of Kirch’s largest creditors, HVB, offered to buy the debt-ridden media mogul’s 40 percent stake in Axel Springer, one of Europe’s biggest newspaper publishers.
Now Dresdner Bank has teamed up with the HypoVereinsbank to make a bid for the Springer shares.
Deutsche Bank has been working on a competing solution, which would involve the break-up and sale of Kirch’s most valuable assets. If either HVB or Dresdner clinches the deal, that would be a blow to Deutsche Bank.
The Springer deal, worth 1.1 billion euro, would go a long way in appeasing Kirch’s creditors, who had accused him of being inflexible in disposing of assets to pay debts of 5.6 billion euro.
The race is on. For Kirch it is a race against time to get the highest offer. And several parties are interested in the prospect of buying a 40 percent stake in one of Europe’s best selling tabloid newspapers.
Looming in the background, looking to take over Kirch’s entire operation, is Rupert Murdoch and as of late, the Italian President and part-time media mogul Silvio Berlusconi.
Kirch is expected to decide this week whether to accept any of the offers.
Life in the fast lane
Kirch may also sell his stake in Formula One to ease his cash crisis, a source close to Kirch told Reuters on Thursday.
In order to keep the core business together, Kirch is considering whether it has to give up other assets as well, the source said.
Kirch's 58 percent stake in Formula 1 could be sold but there were no firm plans yet, according to the source.
Formula One supremo Bernie Ecclestone is said to be interested in buying back the Formula One business from Kirch for 800 million euros, half the price Kirch paid for the stake last year, although he has not personally commented.
Kirch also hold the broadcast rights to the next two soccer World Cups which Kirch paid $1.65 billion to FIFA to obtain. Kirch exercised its option to purchase the worldwide TV
rights for the 2002 and 2006 World Cups following the bankruptcy of ISL-ISMM last May.