German publishing giants Axel Springer and Heinrich Bauer have won HypoVereinsbank and the publisher of news weekly Spiegel as partners for their bidding consortium to take over insolvent KirchMedia.
Help is in sight for bankrupt KirchMedia's woes
Springer said that the aim of the consortium was to take over the successor company of KirchMedia, in which the core rights and TV activities, including broadcaster Pro Sieben Sat 1, will be integrated.
Springer and Bauer would hold a majority stake of 51%, while the remaining 49% in the new KirchMedia would go to Spiegel Verlag, the publisher of news weekly Der Spiegel, and HypoVereinsbank.
Springer said the partners were in the process of examining the economic viability of such an investment and would make a final offer by the end of July.
The Springer foursome is one of an estimated 10 consortia considering bids for KirchMedia, part of the collapsed Kirch media empire that filed for insolvency earlier this year after failing to repay creditors billions of euros in outstanding loans.
Other companies that have signaled their interest in KirchMedia include a consortium of Commerzbank AG and U.S. studio Columbia Tristar, as well as the French TV group TF1.
Bernard Tubeileh, media analyst at Merrill Lynch, said that the new additions to the Springer consortium was making the takeover of KirchMedia by a German consortium “highly likely”. It represented the “strongest German bid”, he said.
The consortium’s takeover of the new KirchMedia would forge an alliance between Germany’s leading commercial TV broadcaster, ProSieben Sat1, and major German publishers that would be “unique in Germany” and would unleash “very large synergies”, Tubeileh said. The purchase price was likely to fall between 2 billion and 3.5 billion euros, he added.